Palo Alto City Council
June 17, 2024

AMENDMENT NO. 1 TO CONTRACT NO. C21179340

BETWEEN THE CITY OF PALO ALTO AND

BAKER TILLY US, LLP
This Amendment No. 1 (this “Amendment”) to Contract No. C21179340 (the “Contract” as defined below) is entered into as of April 18, 2022, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and BAKER TILLY US, LLP, an Illinois Limited Liability Partnership, located at 205 Michigan Avenue, Suite 2800, Chicago, IL 60601 (“CONSULTANT”). CITY and CONSULTANT are referred to collectively as the “Parties” in this Amendment.

R E C I T A L S
A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of performing internal auditor services in accordance with City Charter and Municipal Code requirements, as detailed therein.

B. The Parties now wish to amend the Contract in order to extend by an additional three years the Contract term in which Services will be provided and, therefore, increase compensation by Two Million One Hundred Twenty-Six Thousand Two Hundred and Fifty Dollars ($2,126,250), from an original not-to-exceed amount of One Million Three Hundred Thousand Dollars ($1,300,000) to a new total not-to-exceed amount of Three Million Four Hundred Twenty- Six Thousand Two Hundred and Fifty Dollars ($3,426,250), as detailed herein.

NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree:

SECTION 1. Definitions. The following definitions shall apply to this Amendment:
a. Contract. The term “Contract” shall mean Contract No. C21179861 between CONSULTANT and CITY, dated October 1, 2020.
b. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract.

SECTION 2. Section 2, “TERM,” of the Contract is hereby amended to read as follows:

“The term of this Agreement shall be from October 1, 2020 through June 30, 2025, unless terminated earlier pursuant to Section 19 of this Agreement.”

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SECTION 3. Section 4, “COMPENSATION FOR ORIGINAL TERM,” of the Contract is hereby amended to read as follows:
“The total compensation to be paid to CONSULTANT for performance of the Services, including As Required Services (per Section 1) and any reimbursable expenses, shall not exceed Three Million Four Hundred Twenty-Six Thousand Two Hundred and Fifty dollars ($3,426,250), as detailed in Exhibit B (Compensation).

CONSULTANT agrees to complete all Services, including As Required Services and any reimbursable expenses, within this amount. The applicable rate schedule is set out at Exhibit “B-1”, entitled “SCHEDULE OF RATES,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY.”

SECTION 4. The following exhibit(s) to the Contract are hereby amended or added, as indicated below, to read as set forth in the attachment(s) to this Amendment, which are hereby incorporated in full into this Amendment and into the Contract by this reference:

a. Exhibit “B” entitled “COMPENSATION”, AMENDED, REPLACES PREVIOUS. b. Exhibit “B-1” entitled “SCHEDULE OF RATES”, AMENDED, REPLACES PREVIOUS.

SECTION 5. Legal Effect. Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect.

SECTION 6. Incorporation of Recitals . The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference. (SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.)

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SIGNATURES OF THE PARTIES
IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written.

CITY OF PALO ALTO
______________________________
City Manager
APPROVED AS TO FORM:
______________________________
City Attorney or designee

BAKER TILLY US, LLP
Officer 1
By:______________________________
Name:___________________________
Title:____________________________
Officer 2
By:______________________________
Name:___________________________
Title:____________________________
Attachments:

EXHIBIT B: COMPENSATION (AMENDED, REPLACES PREVIOUS)
EXHIBIT B-1: SCHEDULE OF RATES (AMENDED, REPLACES PREVIOUS) 51 Item 26
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EXHIBIT “B”

COMPENSATION
(AMENDED, REPLACES PREVIOUS)
The CITY agrees to compensate the CONSULTANT for the Services (including As Required Services) performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as Exhibit B-1 up to the not to exceed budget amount for each task set forth below.

CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below.

The CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Services, including As Required Services and any reimbursable expenses do not exceed the amounts set forth in Section 4 of this Agreement.

BUDGET SCHEDULE FOR FY 2020-21 AND FY 2021-22
Budget Schedule FY 2020-21 FY 2021-22 Subtotals
Task 1: Citywide Risk Assessment $65,000.00 $25,000.00 $90,000.00 Task 2: Preparation of Annual Audit
Plan $15,000.00 $15,000.00 $30,000.00
Task 3: Selection of External
Financial Auditor and Annual Audit
Coordination
$30,000.00 $20,000.00 $50,000.00
Task 4: Execute Annual Audit Plan $390,000.00 $600,000.00 $990,000.00 Task 5: Preparation of Quarterly
Reports, Annual Status Report,
Provision of City Hotline, and Other
Ongoing Office Administrative
Functions
$50,000.00 $50,000.00 $100,000.00
Task 6: Evaluation and Benchmarking $0.00 $40,000.00 $40,000.00 Subtotals (FY 2020-21 & FY 2021-22) $550,000.00 $750,000.00 $1,300,000.00 (CONTINUED ON THE NEXT PAGE.)
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BUDGET SCHEDULE FOR FY 2022-23, FY 2023-24 AND FY 2024-25 Budget Schedule FY 2022-23 FY 2023-24 FY 2024-25 Subtotals Task 1: Citywide Risk
Assessment $55,000 $35,000 $55,000 $145,000
Task 2: Preparation of
Annual Audit Plan $10,500.00 $10,500.00 $10,500.00 $31,500.00 Task 3: Selection of External
Financial Auditor and
Annual Audit Coordination
$15,000 $15,000 $25,000 $55,000
Task 4: Execute Annual
Audit Plan $547,250 $582,250 $537,250 $1,666,750
Task 5: Preparation of
Quarterly Reports, Annual
Status Report, Provision of
City Hotline, and Other
Ongoing Office
Administrative Functions
$60,000 $60,000 $60,000 $180,000
Task 6: Evaluation and
Benchmarking $21,000.00 $6,000 $21,000.00 $48,000
Subtotals (FY 2022-23,
FY 2023-24 & FY 2024-25) $708,750.00 $708,750.00 $708,750.00 $2,126,250.00 TOTAL NOT TO EXCEED AMOUNT ACROSS ALL FISCAL YEARS:

Budget Schedule FY 2020-21 and FY 2021-22 Subtotal: $1,300,000.00 Budget Schedule FY 2022-23, FY 2023-24 and FY 2024-25 Subtotal: $2,126,250.00 TOTAL NOT-TO-EXCEED AMOUNT OF THIS AGREEMENT: $3,426,250.00

REIMBURSABLE EXPENSES
The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, computing, telecommunications, insurance and other ordinary business expenses are included within the scope of payment for Services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost:

Travel to or from the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost. Any and all such reimbursable expenses shall be identified by CONSULTANT as separate line items on the applicable Task Order. Consultant travel and meal expenses are not subject to the City’s Travel Policy. CONSULTANT shall identify a fixed “not to 53 Item 26
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exceed” figure for anticipated reimbursable expenses, subject to the City of Palo Alto’s approval of such Task Order.

Should CONSULTANT’S actual incurred expenses exceed the “not to exceed” figure, CONSULTANT and the CITY shall meet in good faith to determine the extent to which CONSULTANT shall be reimbursed by the CITY for the excess.

All requests for payment of expenses exceeding $25.00 shall be accompanied by appropriate backup documentation and information, including without limitation prior City approval as part of the associated Task Order.
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EXHIBIT “B-1”

SCHEDULE OF RATES
(AMENDED, REPLACES PREVIOUS)
Compensation for Services rendered under this Agreement shall be calculated based on the following hourly rate schedule for the fiscal year in which the Services are rendered, which shall remain fixed during the applicable period of fiscal years specified below.

Hourly rates for any subsequent renewal term or terms shall be negotiated to the mutual agreement of the parties.

SCHEDULE OF RATES FOR FY 2020-21 AND FY 2021-22
Staff level Hourly rate
Partner/Director $345
City Auditor/Senior Manager $245
Manager $210
Senior Consultant $185
Consultant $130
SCHEDULE OF RATES FOR FY 2022-23, FY 2023-24 AND FY 2024-25 Staff Level Hourly Rate
Partner/Director $362.00
City Auditor / Senior Manager $257.00
Manager $220.00
Senior Consultant $194.00
Consultant $136.00
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P
age 8 of 8
APPENDIX B – DOCUMENTATION OF TRANSFER
T
he evidence listed in Article 2 of this Assignment:

2.4.1: STATE OF CALIFORNIA OFFICE OF THE SECRETARY OF STATE

CERTIFICATION OF REGISTRATION OUT-OF-STATE LIMITED PARTNERSHIP, dated April 22, 2024
And

2.4.2: NOTICE OF BAKER TILLY ORGANIZATIONAL RESTRUCTURING from Baker Tilly US, LLP
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202461906539
Limited Partnership Name
Limited Partnership Name Baker Tilly Advisory Group, LP Jurisdiction
Limited Partnership is Formed in DELAWARE
Authority Statement
This Limited Partnership currently has powers and privileges to conduct business in the state, foreign country or other jurisdiction entered above.

Street Address of Principal Office of LP
Principal Address 205 NORTH MICHIGAN AVE
CHICAGO, IL 60601
Mailing Address of LP
Mailing Address 205 NORTH MICHIGAN AVE
CHICAGO, IL 60601
Attention
Street Address of Office in Jurisdiction of Formation of LP Street Address of Home Jurisdiction Office None
Agent for Service of Process
California Registered Corporate Agent (1505) CORPORATION SERVICE COMPANY WHICH WILL DO

BUSINESS IN CALIFORNIA AS CSC - LAWYERS

INCORPORATING SERV
Registered Corporate 1505 Agent
General Partners
General Partner Name General Partner Address
Baker Tilly Advisory Group GP, LLC 205 NORTH MICHIGAN AVE CHICAGO, IL 60601
Electronic Signature
I declare that I am the person who signed this instrument, which is my act and deed. I further declare the information is true and correct, and I am authorized to sign.

Charles Droege, COO on behalf of Baker Tilly Advisory Group GP , LLC, GENERAL P ARTNER General Partner Signature
04/22/2024
Date

STATE OF CALIFORNIA
Office of the Secretary of State

CERTIFICATE OF REGISTRATION

OUT-OF-STATE LIMITED PARTNERSHIP
California Secretary of State
1500 11th Street
Sacramento, California 95814
(916) 657-5448
B2677-4976 04/22/2024 8:28 AM Received by California Secretary of State

For Office Use Only
-FILED-
File No.: 202461906539
Date Filed: 4/22/2024
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Delaware
The First State

2949822 8300 Authentication: 203292552
SR# 20241533586 Date: 04-19-24
You may verify this certificate online at corp.delaware.gov/authver.shtml I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY "BAKER TILLY ADVISORY GROUP, LP" IS

DULY FORMED UNDER THE LAWS OF THE STATE OF DELAWARE AND IS IN GOOD

STANDING AND HAS A LEGAL EXISTENCE SO FAR AS THE RECORDS OF THIS OFFICE SHOW, AS OF THE NINETEENTH DAY OF APRIL, A.D. 2024.

AND I DO
HEREBY FURTHER CERTIFY THAT THE SAID "BAKER TILLY
ADVISORY GROUP, LP" WAS FORMED ON THE THIRTIETH DAY OF JANUARY, A.D. 2024.

AND I DO

HEREBY FURTHER CERTIFY THAT THE ANNUAL TAXES HAVE BEEN
ASSESSED TO DATE.

B2677-4977 04/22/2024 8:28 AM Received by California Secretary of State

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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: Police
Meeting Date: June 17, 2024
Report #:2406-3138
TITLE
Approval of: (1) Contract No. C24187724 with LensLock, Inc (Lenslock) for replacement of the police public contact audio/video system for a five (5) year term in an amount not to exceed $1,128,225; and (2) Police Audio/Video Technology Surveillance Use Policy; CEQA status – categorically exempt.

BACKGROUND
This report will be a special late packet release on Thursday, June 13, 2024.

APPROVED BY:

Andrew Binder, Chief of Police
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City Council
Staff Report

From: City Manager
Report Type: ACTION ITEMS
Lead Department: Administrative Services

Meeting Date: June 17, 2024
Report #:2406-3140
TITLE
PUBLIC HEARING: Adoption of Budget Ordinance for Fiscal Year 2025, Including the Operating and Capital Budgets and Municipal Fee Schedule; Adoption of a Resolution determining the Appropriations Limit for Fiscal Year 2025; Acceptance of Updates to the Retiree Healthcare Actuarial Report; and Approval of Contributions for Retiree Healthcare Benefits

RECOMMENDATION
The Finance Committee and Staff recommends that the City Council:

1. Adopt the Fiscal Year 2025 Budget Ordinance (Attachment A), which includes:
a. City Manager’s Fiscal Year 2025 Proposed Operating and Capital Budgets, previously distributed at the May 6 City Council Meeting (Attachment A, Exhibit 1) b. Amendments to the City Manager’s Fiscal Year 2025 Proposed Operating Budget (Attachment A, Exhibit 2)
c. Amendments to the City Manager’s Fiscal Year 2025 Proposed Capital Budget (Attachment A, Exhibit 3)
d. Fiscal Year 2025 City Table of Organization (Attachment A, Exhibit 4); and e. Fiscal Year 2025 Municipal Fee Changes (Attachment A, Exhibit 5) including Impact and In-Lieu Fees (Exhibit 6)

2. Accept the Fiscal Year 2025 – 2029 Capital Improvement Plan

3. Adopt a Resolution determining the Appropriations Limit for Fiscal Year 2025 (Attachment B)

4. Accept the June 30, 2023 biennial actuarial valuation of Palo Alto’s Reti ree Healthcare Plan and approve funding of the Actuarial Determined Calculation (ADC) for Fiscal Year 2025 and Fiscal Year 2026 with a two-year phase-in of the adjusted assumptions using the staff recommended funding level of $19.4 million and affirm the c ontinued practice of transmitting amounts at a lower 5.75 percent discount rate as an additional discretionary payment to the City’s California Employers’ Retiree Benefit Trust (CERBT) Fund (Attachment D)

EXECUTIVE SUMMARY
The FY 2025 Adopted Budget will be $1.1 billion including the FY 2025 capital budget of $ 441.8 million and $1.7 billion over the 2025 -2029 five-year Capital Improvement Plan (CIP). This is an Item 28
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increase of approximately $82.1 million over the proposed budget, mainly due to reappropriation of funding for continuing capital projects as well as funding added for Council Priorities as part of the budget review by the Finance Committee and Council. This budget recommends citywide staffing levels to increase by 29.00 full-time equivalent positions (FTE) from the FY 2024 adopted level for a total authorized staffing of 1,092.10 FTE in FY 2025. This is a net increase of 9.00 FTE from the proposed budget to address Council Priorities and associated administrative support.

This memorandum provides all necessary documents and transactions for the City Council adoption of the Fiscal Year (FY) 202 5 Operating Budget, Capital Budget, and Municipal Fee schedule effective July 1, 202 5, unless o therwise regulated. This action reflects two months of public dialogue by the Council and Finance Committee and provides a summary of all changes to the City Manager’s FY 202 5 Proposed Budget received by the Council on May 6, 202 4. The necessary supporting documents for formal adoption by the City Council include the FY 202 5 Budget Ordinance and the Table of Organization, and Resolution for Appropriations Limit for FY 2025.

On May 21 st the Finance Committee “Committee” (CMR 2402 -26641) unanimously recommended the City Council adopt the FY 2025 budget inclusive of the Final Recommended Changes section of this memorandum. On June 4 th the Finance Committee amended their recommendation to decrease the Real Property Investments Reserve by $1. 5 million to $1.0 million in FY 2025 and ongoing; fund the Budget Stabilization Reserve at the 18.5% level of expenses in FY 2025; and increase the Uncertainty Reserve with remaining savings in FY 2025 for use in the FY 2026 Budget planning process.

All changes to the Proposed Budget recommended by the Finance Committee are detailed for the FY 2025 Operating Budget, by fund and by department, in Attachment A Exhibits 2 through

6. Through the recommended budget actions, the community can expect continued high quality of services in Fiscal Year 2025, with a focus on building and strengthening services throughout the City. In addition, this budget invests in organizational resilience through continued workforce recruitment and retention efforts , furthers innovative service delivery and advances Council Priorities and related workplans.

The City continues to make infrastructure a priority through capital project investments in FY2025 and through the 2025 -20209 Capital Improvement Plan (CIP). The FY 2025 budget includes projects to maintain current infrastructure such as streets, sidewalks , and facilities as well as enterprise funded capital needs such as electric, gas, and water distribution networks and

1 May 21, 2024, Finance Committee, Discussion on the Fiscal Year (FY) 2025 Budget Wrap-Up and Recommended FY 2025 Budget including the FY 2025 Municipal Fee Schedule for City Council Adoption;
https://cityofpaloalto.primegov.com/api/compilemeetingattachmenthistory/historyattachment /?historyId=543c404f-2b05-4cbb-b9df-75ffb768545d
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substantial improvements at the Wastewater Quality Control Plant. The 2025 -2029 CIP also includes projects to upgrade the City’s infrastr ucture such as electric vehicle charging, electric grid modernization, and upgrading the fiber network to allow for Fiber to the Premises (FTTP).

To balance the budget for FY 2025, one-time funding from the Council appropriated Uncertainty Reserve, the Development Services Reserve, and the Budget Stabilization Reserve will be used to fund service priorities. A total of $3.3 million in General Fund expenditures has been added to FY 2025 proposed funding levels to support a number of Council priority progra ms that are listed later in the report.

In addition, during the Budget Hearings, certain items did not require additional funding at the time of budget adoption but were recommended as part of staff’s workplan for FY 2025. These items are listed later in the report and as a path forward staff will provide additional work throughout FY 2025 , including the Ability Path request which will be considered during the FY 2025 Mid-Year Budget Review.

FY 2025 Review Process: Segmentation of Certain Stanford-related Matters The California Political Reform Act (PRA) requires City officials to recuse themselves from matters where it is foreseeable that the City’s decisions may have a material impact on a person or entity that is a “financial interest” to that official, and allows the City to segment multi-part items, such as the City’s budget, so that the parts of the item that are the subject of the recusal are separated from the remaining parts of the item. This year, Council Member Veenker, who provides legal services to Stanford University on life sciences patent matters, will be recus ing herself from certain Stanford -related elements of the budget. Those elements are listed in Attachment C.

Council must consider and resolve the Attachment C items first. Once these items have been resolved, Council Member Veenker will rejoin and the Council will review and approve the remaining sections of the FY 2025 Operating and Capital Budgets and the Municipal Fee Schedule.

Also included in this staff report is the approval of the FY 2025 Appropriations (GANN) Limit that is required under Article XIIIB to the California State Constitution, as amended by proposition 98 in 1988 and Proposition 111 in 1990 (Attachment B). The appropriations limit for Fiscal Year 2025 is $219.74 mi llion for funds subject to the appropriation limits. The City's Fiscal Year 2025 budgeted appropriations are estimated to be $46.64 million under the limit (Attachment B, Exhibit 1).

Links to the meetings with the Finance Committee and the City Council, a s well as the memoranda, presentations, and additional information provided for discussion can be found on the City’s website under the FY 2025 Budget Process section.

BACKGROUND
Per the Municipal Code, the City Manager is charged with proposing a budget that provides a clear and complete financial plan for all City activities proposed for the coming budget cycle, or fiscal year. The FY 202 5 Proposed Operating and Capital Budgets were released April 26, 2024 and transmitted to the City Council at their meeting on May 6, 2024. These documents represent Item 28
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the planned expenditures and revenues for FY 2025 for the various fund types that constitute the City’s Budget: General Fund, Capital Fund, Enterprise Funds, Internal Service Funds, Special Revenue Funds, and Debt Service Funds. The budget documents contain an overview section with descriptions of each of these fund types and detailed information of the revenues and expenses for each fund as well as for each individual department.

The FY 202 5 Proposed O perating and Capital Budgets May 6, 202 4 Council Study Session presentation provided an overview of the budget for review and discussion, including Citywide budget strategies, assumptions used in budget development, and a summary of service investments. As part of this discussion, the City Council provided guidance to the Finance Committee for their review of the budget documents during hearings on May 7, 8, 21, and June

4. The Finance Committee review of operating and capital budgets is structured around p ublic hearings conducted prior to the City Council adoption to complete a detailed review of the budget documents and to incorporate opportunities for community input into the decision - making process. These meeting proceedings are organized by service area and include department presentations to highlight areas of emphasis for their respective department and fund(s). Department by department, the Finance Committee reviews individual budget sections for tentative approval of the budget, potential amendments, and requests for additional information to aid in their review. At the conclusion of these hearings (Budget Wrap -up), the Finance Committee is ultimately tasked to provide recommendations to amend the Proposed Operating and Capital Budgets and Municipal Fee Schedule for City Council consideration. These amendments, and additional information recommended for City Council review, are included in this adoption memorandum.

In addition to the regular schedule, staff held an additional study session on May 13 to check-in with the City Council for their feedback before the final budget wrap meeting s on May 21 and June 4. In addition, a Community Information Session was held on May 15 to directly address questions from residents in the community.

The City Council adoption of the City Manager’s FY 2025 Proposed Operating and Capital Budgets and FY 202 5 Municipal Fee Schedule, including the amendments summarized in the Budget Wrap-up Memorandum on May 21, 2024 (CMR 2402-2664), will represent the ratification of the amendments that were approved by vote through the budget hearings. These amendments include all changes to the Municipal Fee Schedule and the Table of Organization. A comprehensive list of meeting materials issued during Finance Committee budget hearings is available on the City website2.

DISCUSSION
The report is organized by the following sections:
• Background and Discussion: Summary of FY 202 5 budget process and overall balancing strategies organized by fund type, including funding of Council Priorities and Objectives.

2 City’s Budget Website: https://www.cityofpaloalto.org/Departments/Administrative-Services/City- Budget
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• FY 2025 Final Recommended Changes: A summary of final direction given by the Finance Committee on May 21st and June 4 th and additional recommended technical and staff adjustments organized by fund type.

• Table of Organization: A summary of additional changes to the Table of Organization because of adjustments made to the proposed budget that was released on May 6, 2024.

• Municipal Fee Schedule: A summary of the changes in the review and recommendations to Council for the FY 202 5 Municipal Fee Schedule for incorporation in the FY 2025 Proposed Budget (CMR 2402-25873).

• FY 2025 Utility Rate Changes: A brief overview of the rate changes reviewed by the Utilities Advisory Commission and Finance Committee and the final decision the City Council will make on June 17, 2024 (CMR 2404 -2842); each of these rate changes are included in the FY 2025 budget assumptions.

• Attachments: Attached to this report are several documents as outlined and referenced throughout the recommendation languag e and the report. In addition, links to all the materials presented throughout the budget process to the City Council such as staff reports, At Places Memorandums, presentations made during the budget hearings, and transcripts from City Council Budget Hearings are included.

The FY 2025 Proposed Budget outlined a two -year budget balancing strategy, bringing financial planning through June 30, 2026 and recommends using one-time surpluses to bridge near-term shortfalls in FY 2025 and partially offset shortfalls in FY 2026 while investing in priority services, infrastructure, and saving for long -term liabilities. In addition, the strategy also recommends limiting ongoing costs to mitigate the potential for greater future deficits.

Overall, the enhancements reflected in this FY 202 5 Budget will build and strengthen services throughout the City, support continued workforce recruitment and retention efforts, and advance City Council priority initiatives. While there are continued unkno wns and uncertainties ahead, the FY 202 5 Budget offers the Council, community, and staff reason for optimism that 2025 will continue progress to address community priorities and continue robust City services that the community expects through balanced financial strategies.

FY 2025 FINAL RECOMMENDED CHANGES
This section reviews amendments to the FY 202 5 Proposed Operating and Capital Budgets presented to the City Council on May 6, including final adjustments recommended by the Finance

3 May 8, 2024, Finance Committee, FY 2025 Proposed Municipal Fee Schedule; https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=bd4434c1-37fa-440d-8e01- 71211721b2ed
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Committee and technic al adjustments recommended by staff. A comprehensive list of these adjustments is included in Attachment A, Exhibit 2 for changes to the FY 2025 Operating Budget, and Attachment A, Exhibit 3 for changes to the FY 202 5 Capital Budget. Changes to the Table o f Organization are discussed later in this memorandum, and an updated Table of Organization is included in Attachment A, Exhibit 4.

Overall for operating and capital budgets , this reflects an $84.5 million, or 8.2%, in crease compared to the FY 2025 Proposed Budget. This includes an increase from the FY 2025 Proposed Budget of 9.00 FTE full-time staff (8.00 FTE in the General Fund and 1.00 FTE in Enterprise Funds) and a reduction of 0.96 FTE part -time staff ( -1.92 FTE in the General Fund and +0.96 in the Enterprise Fund), resulting in an overall workforce of 1,092. 10 full-time positions (602.57 FTE in the General Fund).

OPERATING BUDGET – General Fund
Overall, the City’s General Fund is recommended to have $287.6 million in revenues and $306.9 million in expenses. To balance the budget for FY 2025, one -time funding from the Council appropriated Uncertainty Reserve, the Development Services Reserve, and the Budget Stabilization Reserve will be used to fund service priorities. A total of $3.3 million in expenditures has been added to FY 2025 proposed funding levels to support a number of Council priority programs that are listed below in Table 1.

Uncertainty Reserve
As part of the FY 2025 Proposed Budget, Staff recommended using $6.9 million of the $9.6 million Uncertainty Reserve to balance FY 2025, leaving $4.7 million in the Uncertainty Reserve, including using $2.0 million from the Budget Stabilization Reserve (BSR) to increase the Uncertainty Reserve for anticipated needs in FY 2026. As a result of actions taken by the Finance Committee, there are additional savings of $1.5 million (including $0.6 million from the BSR) that will be added back into the Uncertainty Reserve and bring it up to $6.2 million. In total, $2.6 million from the BSR will be used to set aside funding in the Uncertainty Reserve. The Uncertainty Reserve of $6.2 million is recommended to fund the FY 2026 projected gross deficit of approximately $11.0 million, leaving a projected net deficit of $4.8 million.

Budget Stabilization Reserve
The FY 202 5 Proposed Budget recommended using $2.0 million from the BSR to provide additional funding in the Uncertainty Reserve , leaving the BSR at $55.0 million or 18.8% of General Fund Expenditures for FY 2025. As part of the budget actions recommended for adoption by the Finance Committee, the BSR will be reduced by $0.6 million to $54.4 million or the 18.5% target level of the Council’ s recommended range of 15 -20% of General Fund Expenditures. The BSR calculation excludes reserves such as the Uncertainty Reserve and the Utility Transfer Legal Cost Reserve to avoid unintentional inflation of BSR needs.

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Finance Committee Recommended Adjustments
Throughout budget hearings in May, the Finance Committee engaged in several meetings to review proposed budget documents and recommend tentative adjustments. Table 1 provides an overview of these adjustments at various touchpoints in the budget process.

TABLE 1: FY 2025 General Fund Recommended Adjustments
Dept
FY 2025 General Fund
Recommended Adjustments
Description
FY 2025
Revenue or
Savings/
(Cost)
Ongoing
Revenue or
Savings/
(Cost)
NON Beginning Balance – City Council Priorities Reserve $- $- NON Increase Gas Transfer to General Fund in FY25 to 14.5% (from

11.9%) & in FY26 to 18% (previously scheduled in FY27)
1,958,000 916,000
NON Increase JMZ ticket prices from $10 to $14, during peak periods
350,000 350,000
NON Use BSR to balance FY 2025 – Reduce BSR to 18.5% 605,000 - OOT Review an alternative service approach for PA Link with reduced net costs (proposed FY2025 budget funds $0.9M)
223,000 60,000
CSD Account for Los Altos & Los Altos Hills contribution for animal control services Report #2403-2827
198,000 198,000
FIR Upstaff Fire Engine 62 with 3 Sworn Staff instead of Overtime 14,000 23,000 Subtotal Sources (Revenue) $3,347,000 $1,547,000

NON Other Post Employment Benefit (OPEB) 2-Year Phase-In (1,650,000) (3,300,000) NON Increase Uncertainty Reserve to $6.2M for Future Needs (1,470,000) - CSD JMZ additional staffing, new ticketing system and promotion (509,000) (702,000) CIP California Avenue Interim Improvements (450,000) -
CIP Additional funding for Roth Building Rehabilitation (PF-23001) (revise terms and conditions of the tenant work letter) $1M total including $0.2M interest earnings previously appropriated (300,000) (500,000)
NON Establish Citywide Special Events & Programming ($265k total program) [Requested UNAFF $45k, 3rd Thursdays $40k,
Neighbors Abroad $30k (already in FY25 Proposed Budget), Magical Bridge $150k, Environmental Volunteers Foothills Nature Preserve Program $11k one-time]
(246,000) (235,000)
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Dept
FY 2025 General Fund
Recommended Adjustments
Description
FY 2025
Revenue or
Savings/
(Cost)
Ongoing
Revenue or
Savings/
(Cost)
NON Palo Alto Transportation Management Association (PATMA) increase to $400,000 Citywide
(175,000) (175,000)
PWD Public Services Streets 311 Requests to support catch-up and keep-up
(100,000) (107,000)
FIR Upstaff Fire Engine 62 with 3 Sworn Staff instead of Overtime (74,000) (120,000) NON Car-free Streetscape Design for Ramona Street (50,000) - CSD Administrative Support for new Citywide Special Events & Programming (1 FTE)
- (125,000)
CIP Study of artificial turf replacement with grass at up to 4 fields (recommend use of current CIP to fund a study)
- -
OOT Review an alternative service approach for PA Link with reduced net costs (proposed FY2025 budget funds $0.9M)
177,000 340,000
NON Reduce Real Property Investment Reserve to $1.0M Annually 1,500,000 1,500,000 Subtotal Uses (Expense) ($3,347,000) ($3,424,000)

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OPERATING BUDGET – Enterprise Funds

Electric Fund – Associate Sustainability Program Administrator This action adds 1.0 FTE Associate Sustainability Program Administrator to the Utilities Resource Management Division. Responsibilities of this position include tracking sales and marketing results, engaging in direct customer calls related to both sales a nd customer experience, and assisting with customer experience improvement for various programs, starting with the heat pump water heater program. This fulfills the Council ’s Climate Action priority by supporting programs to drive gas appliance conversion to electricity and electric vehicle adoption, both of which reduce emissions supporting the City’s green electricity portfolio.

Gas Fund – Equity Transfer to General Fund and Rate Adjustments Consistent with Council direction, this action increases the Gas Fund equity transfer to the General Fund from 11.9 % to 14.5 %, an increase of $2.0 million. This is accompanied by an increase to retail revenues by $2.0 million, supported by an increase to the gas rate in FY 2025 from 9.0% in the proposed budget to 12.5%.

Water Fund – Water System Operations Staffing and Rate Adjustments Staff recommends removing the Water System Operations Staffing Proposal from the FY 2025 Proposed Budget to allow time for discussions with the Service Employee International Union (SEIU). The proposal sought to reclassify four Water System Operator II ’s and two Senior Water System Operators into four Utilities Install/Repairers and two Utility Install/Repairer Leads , respectively.

Staff also recommends a technical adjustment to retail revenues based on the FY 2025 Water Fund Financial Plan, which decreases overall target revenue to $52.8 million. This target incorporates the SFPUC proposed rate of $5.55 per CCF, which has since increased to $5.67 per CCF. Due to this increase, staff originally proposed an increase of 10% to rates ; however, the Finance Committee recommended a 9.5% increase instead with the remaining 0.5% rate to be offset by operations reserves.

OPERATING BUDGET – Other Funds

Gas Tax Fund – Gas Tax Revenue Adjustment
This action is a technical update to increase Gas Tax revenue estimates for Palo Alto based on the California Department of Finance’s May 2024 updates for estimated Highway Users Tax Account (HUTA) and Road Mainten ance and Rehabilitation Account (RMRA) taxes for FY 202 5. This also increases the transfer to the Streets Maintenance capital project (PE -86070), which is discussed below in the Capital Budget section of this report.

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The General Benefits Fund acts as a pass-through to pay the City’s pension and healthcare costs.

These costs are allocated in the various funds across the City where staff are budgeted with the corresponding revenue budgeted in the General Benefits Fund. As staff were added to the budget as part of the FY 2025 Proposed Budget and actions recommended by Finance Committee, the costs were allocated to the funds across the City, but the corresponding revenue in the General Benefits Fund was not included. This net neutral technical action is usually done as part of the adoption memo in the General Benefits Fund and will increase the estimate for charges to other funds by $1.6 million and increase expenses for pension and healthcare costs by $1.6 million to keep the fund in alignment with staffing levels.

Parks Development Impact Fee Fund – Transfer Adjustment A $1,851 reduction in the transfer to the Capital Improvement Fund is recommended to align with recommended adjustments to capital project reappropriations from FY 2024 to FY 2025.

Retiree Healthcare Fund – Other Post-Employment Benefits (OPEB) Actuarial Valuation On June 4, 2024, the Finance Committee unanimously recommended approval of the June 30 , 2023 actuarial valuation of Palo Alto’s Retiree Healthcare Plan (CMR 2402 -2673) included in Attachment D. This report is completed biannually to provide an actuarial valuation detailing the latest status of the City of Palo Alto’s Retiree Healthcare plan s for employees and retirees. The analysis is used to determine the City’s retiree healthcare liability and the annual Actuarial Determined Contribution (ADC) to the trust. In addition, the report details funding status, results of assumptions such as disc ount rate (DR), healthcare plan premiums, and projected future healthcare costs. During the June 4, 2024 meeting, the Finance Committee recommended a two- year phase-in of the financial impacts of the June 30, 2023 valuation. The Finance Committee also affirmed the continued practice of transmitting amounts at a lower 5.75 percent discount rate as an additional discretionary payment to the City’s California Employers’ Retiree Benefit Trust (CERBT) Fund. This recommendation supports financial flexibility for the provision of services citywide while continuing to proactively prefund long-term obligations in alignment with the City Council’s Retiree Benefits Funding Policy. This action results in an FY 2025 Adjusted ADC of $19.4 million citywide (approximately $ 12.2 million in the General Fund), a $2.6 million ($1.7 million in the General Fund) increase from the $16.8 million ADC from the June 30, 2021 valuation used to develop the FY 2025 Proposed Operating Budget. A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1.

University Avenue Fund – Palo Alto Transportation Management Authority (PATMA) Finance Committee recommends $200,000 in additional funding for the Palo Alto Transportation Management Association (PATMA), increas ing the total funding allocation from $200,000 to $400,000, with $25,000 funded by the University Avenue Parking Fund and $175,000 supported by the General Fund, to maintain current service levels. This brings the funding level to $200,000 from each fund. Previously, PATMA spent down reserves to maintain service levels and has exhausted those funds. Additional information can be found in the PATMA annual report (Report #2403-27614).

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CAPITAL BUDGET
The City’s Capital Improvement Plan reflects a $ 441.8 million FY 2025 budget, and a $1.7 billion plan over the five -year CIP (FY 2025-FY 2029). Of this, the Capital Improvement Fund FY 2025 budget reflects expected expense of $124.7 million and $845.8 million over the five-year CIP.

Capital Reappropriations
The Municipal Code requires City Council authorization to reappropriate funds for capital projects from one fiscal year to the next. The FY 2025 budget process continues this procedure, and the FY 2025 Proposed Capital Budget included approximately $147.1 million in reappropriated funds for project expenditures across all funds. In the time since the FY 2025 Proposed Budget figures, Staff refined the FY 2024 estimated project activity levels and provided further updates to increase the reappropriations by $81.6 million, to $228.7 million across all funds. The additional reappropriation adjustments are summarized in Attachment A, Exhibit 3.

Other Capital Project Adjustments
In addition to the reappropriations from FY 202 4 to FY 2025, several capital projects need to be adjusted based on updated information that became available after the release of the FY 202 5 Proposed Capital Budget or as a result of actions recommended in this memorandum. These adjustments are discussed below and summarized in Attachment A, Exhibit 2.

Capital Improvement Fund
- Baylands Boardwalk Piling Repair (PE-24000) – The FY 2025 Proposed Budget includes $660,615. An additional $203,000 is needed in FY 2025 because bids received in early May were higher than the engineer’ s estimate. A contract for repairs will be going to City Council on June 18, 2024, and if it is not awarded at the start of FY 2025, the Baylands Boardwalk will need to be closed.

- California Avenue Streetscape Update (PL-23000) – The California Avenue interim improvements are within the 2024 City Council Priority objectives. Description and funding are specified as part of Supplemental Report #2405 -29695. Finance Committee recommends a $450,000 transfer from the General Fund to the Capital fund to support street paving adjustments, signage, planters, and site furniture.

- Roth Building Rehabilitation (PF-23001) – The Palo Alto Museum ( PAM) requested reimbursement of $1 million for inflationary cost increases. Because $0.2 million of

4 April 24, 2024; Finance Committee; Receive and Discuss the Palo Alto Transportation Management Association (PATMA) 2023 Annual Report, Strategic Plan, and Commute Survey; https://portal.laserfiche.com/Portal/DocView.aspx?id=71653&repo=r-704298fc&searchid=da277587- f6b6-4b90-aba4-da79874ca271
5 May 7, 2024; Finance Committee; Supplemental Report: Additional Funding Proposal Options for FY 2025 Budget Process Consideration;
https://portal.laserfiche.com/Portal/DocView.aspx?id=72129&repo=r-704298fc&searchid=f607c99c- a0b7-4c6e-9217-eaaeb21ee1d7
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interest earnings from Transfer Development Rights funding and other funding to support the project had already been allocated to the project in FY 2024 as part of the Mid -Year Review (Report #2311-22336), Finance Committee recommends increased funding of $0.8 million: $0.3 million in FY 2025, funded by a transfer from the General Fund to the Capital Improvement Fund; and $0.5 million in FY 2026.

- Street Maintenance (PE -86070) – The budget is recommended to be increased by $79,378 annually to align with the California Department of Finance’s May 2024 estimates for FY 2024-25 Gas Tax revenue.

Gas Fund
- Gas System, Customer Connections (GS-80017) – The FY 2025 Proposed Budget included a technical error which added $147,200 to the project. The recommended correction would reduce the cost of the project from $847,200 to the appropriate amount of $700,000.

- Gas Main Replacements #25 (GS -15000) – To mitigate further rate increases related to the increased Gas Fund equity transfer from 11.9% to 14.5%, and to maintain a sufficient reserve balance, staff recommends reducing the FY2025 budget for this project by $0.7 million. There is an upcoming grant that will restore this capital project funding.

TABLE OF ORGANIZATION

During budget hearings and in subsequent City Council meetings, the Finance Committee and City Council recommended staffing adjustments of 9.00 FTE (net). A more detailed description of these actions is included in Attachment A, Exhibit 2, and an updated Table of Organization is included in Attachment A, Exhibit 4:

• Add 3.00 Fire Fighter EMTs to the Fire Department
• Add 1.00 Program Assistant I to the Community Services Department • Add 4.00 Animal Caretakers to the Community Services Department • Add 1.00 Associate Sustainability Program Administrator to the Utilities Department • Add 4.00 Water System Operator II to the Utilities Department • Add 2.00 Senior Water Systems Operator to the Utilities Department • Delete 4.00 Utilities Install/Repair from the Utilities Department • Delete 2.00 Utilities Install/Repair-Leads from the Utilities Department

MUNICIPAL FEE SCHEDULE

On May 8, 2024, the Finance Committee reviewed the FY 2025 Proposed Municipal Fee Schedule

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and recommended approval as outlined in CMR 2402-25877 and further amended on May 21, 2024 (CMR 2402 -2664). Attachment A, Exhibit 5 provides a summary of a ll recommended changes as reviewed by the City Council on May 8, 2024. Additionally, Exhibit 6 provides a summary of changes to Impact and In-Lieu Fees.

Affordable Housing Fee Waiver
As part of this amendment, a new fee was introduced to waive City staff costs associated with processing one hundred percent (100%) affordable housing planning applications under the Housing Element Program Implementation 3.1 f or Fee Waivers and Adjustments. The objective of the fee waiver is to support the production of affordable housing in Palo Alto. Approval of this fee is expected to reduce planning application costs by approximately $5,000 to $20,000 per affordable housing project that is processed for a planning entitlement. Due to the low volume of one hundred percent affordable housing applications, staff anticipates minimal revenue impact in FY 2025.

FISCAL YEAR 2025 RATE CHANGES

An overview of the rate changes was reviewed and approved by the Utilities Advisory Commission (UAC) and Finance Committee in April 2024. These rate changes are included in the FY 2025 budget assumptions. This section references those changes for informati onal purposes only; a separate report recommending final rate changes will be considered by the City Council on June 17, 2024 (CMR 2404-2842).

• 9.0% rate change for Electric (recommended by UAC and Finance Committee); • 2.6% CPI increase for Fiber (recommended by UAC and Finance Committee); • 12.5% rate increase for Gas (recommended by UAC at 9% and Finance Committee at

12.5%);
• 0.0% rate change for Refuse;
• 2.6% CPI increase for Stormwater (recommended by UAC and Finance Committee); • 15.0% rate change for Wastewater (recommended by UAC and Finance Committee); and • 9.5% rate change for Water (recommended by UAC at 10% and Finance Committee at

9.5%)

The proposed rate changes will allow Palo Alto to invest in utility infrastructure, gradually increase reserves to guideline levels, and to support community goals. As utility infrastructure ages, investment is needed to maintain the reliability of the electric, gas, stormwater, wastewater, and water utilities. These rate increases will support the maintenance and replacement of infrastructure including rebuilding Palo Alto’s wastewater treatment plant (Regional Water Quality Control Plant). Investment in modernizing the electric grid will allow the City to achieve the Council’s Sustainability and Climate Action goals.

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The Finance Committee tentatively approved the rate changes listed above including the following modifications from the Proposed Budget: the 12.5 % increase for Gas resulted from changing the Gas Equity Transfer to the General Fund from 11.9% to 14.5% of F Y 2023 gross revenue; and lowering the distribution rate increase to maintain an overall expected bill impact of 9.5% percent increase for Water through the use of additional rate stabilization reserve funds in FY 2025. In addition, the Finance Committee t entatively approved the 9.0 % increase for the median residential electric customer which is a result of a cost of service analysis (COSA) for the City’s electric rates to ensure that electric rates continue to represent the Utility’s cost to serve customers; the 15.0 % increase for Wastewater Collection due to increasing Capital costs in Wastewater Collection and at the Regional Water Quality Control Plant; the 2.6% CPI increase for Fiber customers on the EDF-1 rate in accordance with the original dark fibe r leasing agreement; and 2.6% CPI increase for Stormwater, consistent with the 2017 Storm Water Management Fee ballot measure, to keep fund revenues consistent with inflationary cost increases and to provide sufficient funds for planned Stormwater Management capital and operating expenditures.

STAFF WORKPLAN

During the Budget Hearings, certain items did not require additional funding at the time of budget adoption but were recommended as part of staff’s workplan for FY 2025. The list below is reflective of the items from the Budget Hearings that staff will pro vide additional work throughout FY 2025.
- Ability Path (Request $250,000)
The Committee on June 4 th requested that the Ability Path request be considered during the FY 2025 Mid-Year budget Review.
- Analyze Fire Emergency Medical Response Fee Adjustments (Ongoing Revenue TBD) The Committee requested an analysis of Fire Emergency Medical Response Fees to offset the costs of City medical response costs. In FY 2025, the Citywide Cost Allocation Plan and Municipal Fee Study will be fully reviewed, including further analysis of Fire EMS response fees for appropriate alignment to cost recovery levels. Such draft fees will be presented to the Committee and Council for review and approval and take effect in July 2025. - Fire Emergency Medical Response; Supplemental Resources (Estimated costs: $1,000,000 - $4,000,000 Ongoing)
The Committee requested staff analyze different EMS models and associated fiscal impacts that would improve the City’s capacity to cover ambulance call volume during peak hours. During the budget hearings, the Committee reviewed this contract option, and recommended the consideration of two different model options to establish a supplemental ambulance unit. One model is an activation through staffing, which can be accomplished through either traditional sworn staffing (i.e. Firefighters) or civilian staffing (i.e. Single Role). This staffing approach would require labor discussions, includes staffing engines at Fire Station s 2 and 4, and with a multi -year phased -in implementation ultimately costing approximately $3.2 million to $4.0 million annually. The second model is an activation through third -party contract services, which would require a robust Item 28
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procurement solicitation (i.e. RFP process ), with an informal quotation of $1.0 million annually. This is an essential service that needs to be implemented correctly, and accordingly, staff proposes to analyze this during FY 2025 and provide the Committee and Council with an in -depth analysis of the two models, fiscal impacts, and feasibility and implementation. Budgetary appropriation would follow such analysis and Council authorization.
- Review Parks Restroom Prioritization (Specifically Pardee Park (Ongoing capital project costs TBD)
The Committee requested staff to review parks restroom prioritization with a focus on Pardee Park. Several considerations influence the prioritization of park restroom projects. The Parks, Trails, Natural Open Space and Recreation Master Plan (2017) states, “The City will actively pursue adding park restrooms in parks that are approximately 2 acres or larger, have amenities that encourage visitors to stay in the park, have a high level of use and have no nearby restrooms.” Using those criteria, the following potential locations were included in the Master Plan: Bol Park, Bowden Park, Eleanor Pardee Park, Johnson Park, Ramos Park, Robles Park, and Terman Park. These are further prioritized by the level of community support, existing amenities in the p ark that may draw large crowds, timing with other projects in the same park, and other factors such as access to utilities. Additionally, restrooms in other parks may be prioritized above those identified in the Master Plan if a need arises due to an incre ase in park visitation from adding new amenities such as playgrounds or pickleball courts. The 2025-2029 Capital Improvement Plan includes funding in the Park Restroom Installation project (PG-19000) for the installation of restrooms in City parks every ot her year. A restroom at Mitchell Park is scheduled for installation in FY 2024, while specific parks have not yet been identified for restroom installations in FY 2026 and FY 2028. Staff recommends adding Eleanor Pardee Park to the workplan in FY 2026 and evaluating the workplan for FY 2028 in line with the Foothills Nature Preserve Restroom Replacement project (PE-26000) to align with staff workload capacity to install park restrooms . CSD staff can do some initial outreach starting in Fall 2024 for Eleanor Pardee Park given the previous opposition to restrooms at that location in 2007 and 2013, with the goal of funding it in the FY 2026 Capital budget. - Active Recruitment Digital Marketing Services (Contract Services) On May 7, 2024, the Committee directed s taff to analyze a pilot recruitment digital marketing services for talent attraction to support organizational resilience. While the original estimate is $250,000, later reduced to $50,000 placeholder, staff at this time proposes this as an FY 2025 work p lan item to analyze a pilot program in collaboration with city departments and contract vendor(s). No budget appropriation is requested at this time, but should a need arise, staff will update Council at FY 2025 mid-year. - Establish Organizational Development & Safety Division ($135,000 Ongoing; 50% GF/50% ISF)
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On May 7, 2024 , the Committee added 1.0 FTE focused on organizational development and safety division with Human Resources. Staff proposes this to be a FY 2025 work plan item to allow time to analyze and align with the risk function transition currently underway between Human Resources and Administrative Services. Funding for this position would be split equally between the General Fund and the General Liability Fund, but no appropriation is requested for FY 2025.
- Explore financial, outreach, and policy processes for adding East Palo Alto to resident rates for the golf course (Ongoing revenue reduction TBD)
The Committee directed staff to explore providing the discounted residents rates for Palo Alto golf to East Palo Alto (EPA) residents. Staff proposes this to be a FY 2025 work plan and estimates any fiscal impact, if significant, may be incorporated into the FY 2025 mid- year budget update.
- Increasing Revenue -Generating CSD Programming to Me et Demand (Ongoing cost & revenue TBD)
The Committee directed staff to analyze flexibility in increasing CSD classes to meet demand. This will likely entail a review of class demand, procurement, and facility capacity. Staff proposes this to be a FY 2025 work plan, and no budget adjustment is requested at this time.

APPROPRIATIONS LIMIT FOR FISCAL YEAR 2025

California voters approved an initiative on November 6, 1979 that added Article XIIIB to the State Constitution, as amended by Proposition 98 in 1988 and Proposition 111 in 1990. The provisions of this article place limits on the amount of revenue that can be appropriated by all entities of government. The appropriation limit is adjusted annually on the basis of population and per capita income changes provided annually by the California Department of Finance . Based on Article XIIIB, the City of Palo Alto can use the larger of two measurements of population growth, (county or city population growth) in the appropriations limit calculation. For Fiscal Year 2025, the City is using the 2023-2024 percent change in population growth of the County of Santa Clara in the calculation. The City typically uses the highest factor in order to provide maximum appropriation flexibility.

The appropriations limit for Fiscal Year 2025 is $219.74 million for funds subject to the appropriation limits. The City's Fiscal Year 2025 budgeted appropriations are estimated to be $46.64 million under the limit (Attachment B, Exhibit 1). As required by State law, documentation used to compute the appropriations limit has been made available to the public at least fifteen days prior to the Council meeting at which the appropriations limit is being adopted, and notice was published of the availability of these materials.

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RESOURCE IMPACT

This report summarizes and seeks the City Council approval of the FY 2025 Operating and Capital Budgets, the supporting fee schedules, and table of organization in order to support the projections and appropriations included.

The approval of the City Manager’s FY 2025 Capital and Operating Budget, as recommended to be amended in this report, would result in a projected General Fund Budget Stabilization Reserve of $54.4 million. At recommended expense levels of $294.2 million, after adjusting for reserves such as the Uncertainty Reserve and the Utility Transfer Legal Cost Reserve, the BSR is at 18.5%, the Council’s target in the recommended range of 15 -20% of General Fund Expenditures.

Exclusion reserve funding has been done to avoid unintentional inflation of the BSR. The projected changes to the fund balance for all other funds including Enterprise Funds, Internal Services Funds, Special Revenue Funds, and Capital Funds are outlined in Attachment A and accompanying exhibits and impacts to fund balance summarized in Table 2.

TABLE 2: Resource Impact (Non-General Funds with Fund Balance Change) Fund Type Fund Name
Fund Balance
Change
Capital Capital Improvement Fund -$6.3M
Cubberley Infrastructure Fund -$1.0M
Enterprise Airport Fund -$12k
Electric Fund -$9.2M
Fiber Fund -$6.4M
Gas Fund -$4.1M
Refuse Fund -$48k
Stormwater Management Fund -$5.9M
Utilities Administration Fund +$3k
Wastewater Collection Fund +$35k
Wastewater Treatment Fund -$7.3M
Water Fund -$6.0M
Internal
Service General Benefits Fund +$0.3M
Printing and Mailing Fund -$5k
Technology Fund -$1.3M
Vehicle Fund +$0.3M
Special
Revenue
California Avenue Parking Permit
Fund -$1k

Parks Development Impact Fee
Fund +$2k
Residential Parking Permit Fund -$1k

University Avenue Parking Permit
Fund -$27k
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STAKEHOLDER ENGAGEMENT
The budget process is structured around public hearings conducted before City Council adoption to complete a detailed review of the budget documents and incorporate opportunities for community input in the decision -making process. The community was encouraged to engage with the budget process through scheduled public meetings with the Finance Committee and City Council, a community informational session with City staff, and direct emails to the City Manager and City Council. Additionally, the City maintains a dedicated webpage for meeting materials and other budget information8.

ENVIRONMENTAL REVIEW
Adoption of the City budget and associat ed actions is not a project under California Environmental Quality Act (CEQA) Guidelines Section 15378(b)(5) (organizational or administrative activities that will not result in direct or indirect physical changes in the environment).

Attachments:

Attachment A - FY 2025 Budget Adoption Ordinance
Attachment A, Exhibit 1 - City Manager's Fiscal Year 2025 Proposed Operating & Capital Budgets & Municipal Fee
Attachment A, Exhibit 2 and 3 - Amendments to the City Manager's Fiscal Year 2025 Proposed Operating and Capital Budgets
Attachment A, Exhibit 4 - Table of Organization
Attachment A, Exhibit 5 - Fiscal Year 2025 Municipal Fee Changes Attachment A, Exhibit 6 - Impact and In-Lieu Municipal Fees Attachment B - FY 2025 City Appropriations Limit Resolution Attachment B, Exhibit 1 - Appropriations Limit Calculation Attachment C - FY 2025 Summary of Stanford Investments
Attachment D - June 30, 2023 OPEB Actuarial Valuation Report (CMR 2402-2673) Attachment D, Exhibit 1 - Central OPEB Adjustments in Various Funds Attachment E - Planning and Transportation Commission Letter of the 2025-2029 Capital Improvement Plan to the City’s Comprehensive Plan

APPROVED BY:

Lauren Lai, Administrative Services Director

8 City’s Budget Website: www.cityofpaloalto.org/budget
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ATTACHMENT A

1 ORDINANCE NO. XXXX

ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO ADOPTING THE BUDGET FOR FISCAL YEAR 2025

SECTION 1. The Council of the City of Palo Alto finds and determines as follows:

A. Pursuant to the provisions of Section 6(g) of Article IV of the Charter of the City of Palo Alto and Chapter 2.28 of the Palo Alto Municipal Code, the City Manager has prepared and submitted to the City Council, by letter of transmittal, a budget proposal for Fiscal Year 2025; and

B. Pursuant to the provisions of Section 12 of Article III of the Charter, the Council did, on June 17, 2024, hold public hearings on the budget after publication of notice in accordance with Section 2.28.070 of the Palo Alto Municipal Code; and

C. In accordance with the provisions of Chapter 8 of Division 1, of Title 7, commencing with Section 66016 of the Government Code, as applicable, the Council did on June 17, 2024, hold a public hearing on the proposed amendments to the Municipal Fee Schedule, after publication of notice and after availability of the data supporting the amendments was made available to the public at least 10 days prior to the hearing.

SECTION 2 . Pursuant to Chapter 2.28 of the Palo Alto Municipal Code, the following documents, collectively referred to as “the budget” are here by approved and adopted for Fiscal Year 2025:

(a) The budget document (Exhibit “1”) containing the proposed operating and capital budgets submitted on May 6, 2024, by the City Manager for Fiscal Year 202 5, entitled “City of Palo Alto - City Manager’s Fiscal Year 202 5 Proposed Budget” covering General Government Funds, Enterprise Funds , Special Revenue Funds, and Internal Service Funds, a copy of which is on file in the Department of Administrative Services, to which copy reference is hereby made concerning the full particulars thereof, and by such reference is made a part hereof; and

(b) The Amendments to the City Manager’s Fiscal Year 2025 Proposed Budget, attached hereto as Exhibit “2”and Exhibit “3” and made a part hereof; and

(c) Changes and revised pages in the Table of Organization, as displayed on pages 503 through 524 in “Exhibit 1,” and amended in Exhibit “4” made a part hereof; and

Item 28
Attachment A - FY 2025
Budget Adoption
Ordinance.pdf

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ATTACHMENT A

2 (d) Fee changes of the Municipal Fee Schedule attached hereto as Exhibit “ 5” including changes to Impact and In-Lieu Fees attached hereto as Exhibit “6”.

SECTION 3. The sums set forth in the budget for the various departments of the City, as herein amended, are hereby appropriated to the uses and purposes set forth therein.

SECTION 4. All expenditures made on behalf of the City, directly or through any agency, except those required by state law, shall be made in accordance with the authorization contained in this ordinance and the budget as herein amended.

SECTION 5. Appropriations for the Fiscal Year 202 4 that are encumbered by approved purchase orders and contracts for which goods or services have not been received or contract completed, and/or for which all payments have not been made, by the last day of the Fiscal Year 2024 shall be carried forward and added to the fund or department appropriations for Fiscal Year 2025.

SECTION 6 . The City Manager is authorized and directed to make changes in the department and fund totals and summary pages of the budget necessary to reflect the amendments enumerated and aggregated in the budget as shown in Exhibit “2” and Exhibit “3” and the Fiscal Year 2024 appropriations carried forward as provided in Section 5.

SECTION 7. As specified in Section 2.04.320 of the Palo Alto Municipal Code, a majority vote of the City Council is required to adopt this ordinance.

SECTION 8. As specified in Section 2.28.140(b) of the Palo Alto Municipal Code, the Council of the City of Palo Alto hereby delegates the authority to invest the City’s funds to the Director of Administrative Services, as Treasurer, in accordance with the City’s Investment Policy for Fiscal Year 2025.

SECTION 9. The Council of the City of Palo Alto adopts the changes to the Municipal Fee Schedule as set forth in Exhibit “5” including changes to Impact and In-Lieu Fees in Exhibit “6”.The amount of the new or increased fees and charges is no more than necessary to cover the reasonable costs of the governmental activity, and the manner in which those costs are allocated to a payer bears a fair and reasonable relationship to the payer’s burden on, or benefits received from, the governmental activity. All new and increased fees shall go into effect immediately; provided that pursuant to Government Code Section 66017, all Planning & Community Environment Department fees relating to a “devel opment project” as defined in Government Code Section 66000 shall become effective sixty (60) days from the date of adoption.

SECTION 10. Fees in the Municipal Fee Schedule are for government services provided directly to the payor that are not provided to those not charged. The amount of this fee does not Item 28
Attachment A - FY 2025
Budget Adoption
Ordinance.pdf

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ATTACHMENT A

3 exceed the reasonable costs to the City of providing the services. Consequently, pursuant to Art.

XIII C, Section 1(e)(2), such fees are not a tax.

SECTION 1 1. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption.

SECTION 12. The Council of the City of Palo Alto hereby finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary.

INTRODUCED AND PASSED: Enter Date Here

AYES:

NOES:

ABSENT:

ABSTENTIONS:

NOT PARTICIPATING:

ATTEST:

_________________________ ___________________________ City Clerk Mayor

APPROVED AS TO FORM:

APPROVED:

City Attorney

City Manager

Director of Administrative Services

Item 28
Attachment A - FY 2025
Budget Adoption
Ordinance.pdf

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Fiscal Year 2025 City Manager’s
Proposed Operating & Capital Budgets and Municipal Fees

These documents were originally distributed on May 6, 2024. Printed copies of the Proposed Budgets are available upon request for $52 per book (FY 2025 fee).

Printed copies of the Municipal Fees are available upon request for $10 per book.

These documents may be viewed at any City of Palo Alto Library or the City’s website: www.cityofpaloalto.org/Departments/Administrative-Services/City- Budget

Changes to the Municipal Fee Schedule were distributed in the Finance Committee Packet on May 8, 2024. The City Manager’s Staff Report (#2402-2587) can be viewed on the City’s website:
https://portal.laserfiche.com/Portal/DocView.aspx?id=72200&repo=r- 704298fc&searchid=0a25061d-0e21-473a-a742-35378746d846

In addition, various at places memorandum and presentations were presented throughout the Finance Committee Hearings in May 2024 to provide additional information. These documents can be found on the City’s budget website under “FY 2025 Budget Process”: www.cityofpaloalto.org/Departments/Administrative- Services/City-Budget

ATTACHMENT A, EXHIBIT 1
Item 28
Attachment A Exhibit 1 -
City Manager's Fiscal Year
2025 Proposed Operating
& Capital Budgets &
Municipal Fee.pdf

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ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment
GENERAL FUND (102 & 103)
Community Services Ticketing Revenue/ JMZ Staffing and Programming Augmentation Consistent with Finance Committee's direction, this action augments the Junior Museum and Zoo (JMZ) staffing by adding 1.0 Program Assistant I for Guest Services, and converting four Zoological Assistants (allocated at .48 FTE each) to four full-time Animal Caretakers. The conversion for the four positions will take effect in January. Additionally, the plan allocates $211,000 for a new JMZ ticketing system and increases revenue, reflecting peak hour ticket pricing. The costs will be partially offset by revenue from an increase to the ticket prices from $10 to $14 during peak operations. (Ongoing Net Costs: $352,000)

3.08 350,000$ 509,026$
Community Services Los Altos and Los Altos Hills Animal Care Revenue This action increases revenue from Los Altos and Los Altos Hills in accordance with the latest contract renewal (CMR 2403-2827), effective July 1, 2024, for providing animal care and control services. (Ongoing Savings: $198,000)
198,338$ -$
Fire Revenue from Stanford University/ Upstaff Fire Engine 62 with three Sworn Staff instead of Overtime
Consistent with Finance Committee's direction, this action adds

3.00 Firefighter EMTs to fill one Daily shift position at Fire Engine

62. These staff will increase fire response capability by converting the squad vehicle at Fire Station 2 to a full Fire Engine through sworn staff rather than on overtime. The addition of these staff will be partially offset with revenue from Stanford University per the fire services agreement between the University and the City. (Ongoing Net Costs: $97,000)

3.00 14,078$ 74,093$
Non-Departmental Transfer to the Capital Improvement Fund for California Avenue Interim Improvements
In support of City Council priority objectives, this action transfers $450,000 to the Capital Improvement Fund for street paving adjustments, signage, planters, and site furniture in the California Avenue Streetscape Update project (PL-23000). (Ongoing Costs: $0) -$ 450,000$
Non-Departmental Transfer to the Capital Improvement Fund for Roth Building Rehabilitation
This action transfers $300,000 to the Capital Improvement Fund to reimburse the Palo Alto Museum (PAM) for inflationary cost increases related to the Roth Building Rehabilitation project (PF- 23001). (Ongoing Costs: $500,000, FY 2026 only)
-$ 300,000$

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 PROPOSED BUDGET Item 28
Attachment A Exhibit 2
and 3 - Amendments to
the City Manager's Fiscal
Year 2025 Proposed
Operating and Capital
Budgets.pdf

Item 28: Staff Report
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ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment
GENERAL FUND (102 & 103)

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 PROPOSED BUDGET Non-Departmental Ramona Car-Free Streetscape Design
This action provides $50,000 in one-time funding to begin engagement with stakeholders about the future of Ramona Street as a car-free street. Funding will be used to onboard consultant resources that will be responsible for conducting stakeholder engagement, designing alternatives, considering legal strategies for permanent status as a car-free street, and addressing potential impacts for Ramona as a historic district. (Ongoing Costs: $0) -$ 50,000$
Non-Departmental City Wide Special Event Funding Consolidation Consistent with Finance Committee Direction, this action adds funding for the following citywide events and programming: UNAFF ($45k), 3rd Thursdays ($40k), and Magical Bridge ($150k) as well as one-time funding for Environmental Volunteers Foothills Nature Preserve ($11k). During deliberations, Neighbors Abroad was also considered, but funding for this program is already included in the FY 2025 budget. (Ongoing Costs: $235,000)
-$ 246,000$
Non-Departmental Uncertainty Reserve
As a result of actions taken by the Finance Committee, funding of approximately $1.5 million is available to increase the Uncertainty Reserve for use during the FY 2026 Budget process. This action will increase the remaining funds in the Uncertainty Reserve to $6.2 million. (Ongoing Costs: $0, $6.2 million one-time reserve) -$ 1,470,442$
Non-Departmental Real Property Investment Reserve
Consistent with Finance Committee Direction on June 4, 2024, this action reduces the Real Property Investment Reserve from $2.5 million to $1.0 million annually. (Ongoing Savings: $1,500,000) -$ (1,500,000)$
Office of
Transportation
Revenue from Stanford University/ Palo Alto Link
This action reduces the net City cost of providing Palo Alto Link services by $400,000 through a combination of reduced service levels (including reduction of service hours and areas, and limitation of ridership) and increased revenue (including fare increases and additional support from Stanford). (Ongoing Net Savings: $400,000)
223,000$ (177,000)$
Office of
Transportation
Palo Alto Transportation Management Authority (PATMA)
This ongoing action increases the allocation for PATMA by $200,000, from $200,000 to $400,000, to maintain current service levels, with $25,000 funded by the University Avenue Parking Fund and $175,000 supported by the General Fund. Previously, PATMA spent down reserves to maintain service levels and has exhausted those funds. (Ongoing Costs: $175,000)
-$ 175,000$
Public Works Public Services Streets & Sidewalks 311 Service Requests Staffing This ongoing action adds two hourly (0.46 FTE each) General Laborer positions to support work orders generated from Palo Alto 311 streets and sidewalks service requests and address an existing backlog. (Ongoing Costs: $107,000)

0.96 -$ 100,199$
Item 28
Attachment A Exhibit 2
and 3 - Amendments to
the City Manager's Fiscal
Year 2025 Proposed
Operating and Capital
Budgets.pdf

Item 28: Staff Report
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ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment
GENERAL FUND (102 & 103)

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 PROPOSED BUDGET Utilities Gas Fund Equity Transfer
Consistent with Council direction, this action increases the Gas Fund equity transfer to the General Fund from 11.9% to 14.5%, an increase of approximately $2.0 million. This is accompanied by an increase to retail revenues in the Gas Fund by approximately $2.0 million, supported by an increase to the gas rate in FY 2025 from

9.0% in the proposed budget to 12.5%. (Ongoing Savings: $916,000, FY 2026 Only)
1,958,000$ -$
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing costs: $3,300,000)
-$ 1,650,657$
Fund Balance Adjustment to Fund Balance (Budget Stabilization Reserve) This action adjusts the fund balance to offset adjustments recommended in this report.
-$ (605,000)$
GENERAL FUND (102 & 103) SUBTOTAL 7.04 2,743,416$ 2,743,416$ Item 28
Attachment A Exhibit 2
and 3 - Amendments to
the City Manager's Fiscal
Year 2025 Proposed
Operating and Capital
Budgets.pdf

Item 28: Staff Report
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ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment

CAPITAL IMPROVEMENT FUNDS
CAPITAL IMPROVEMENT FUND (471)
Capital Capital Improvement Project Amendments to Proposed Reappropriations
This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below.
(1,851)$ 6,088,590$
Capital Transfer from Gas Tax Fund/Street Maintenance (PE-86070) This action increases the transfer from the Gas Tax Fund and the Street Maintenance project's budget by $79,378 annually to align with the California Department of Finance’s May 2024 updates for estimated 2024-25 Gas Tax Revenue.
79,378$ 79,378$
Capital Baylands Boardwalk Piling Repair (PE-24000)
To avoid boardwalk closure, this action increases the project's budget by $203,000 to support repair work for which bids were higher than the engineer's estimate.
-$ 203,000$
Capital Transfer from the General Fund/ California Avenue Streetscape Update (PL-23000)
In support of City Council priority objectives, this action increases the project's budget by $450,000 for street paving adjustments, signage, planters, and site furniture, offset with a transfer from the General Fund in the same amount.
450,000$ 450,000$
Capital Transfer from the General Fund/ Roth Building Rehabilitation (PF- 23001)
This action provides a $300,000 reimbursement to the Palo Alto Museum (PAM) for inflationary cost increases, offset with a transfer from the General Fund in the same amount. (Ongoing Costs: $500,000, FY 2026 only)
300,000$ 300,000$
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $108,000)
-$ 54,109$
Fund Balance Adjustment to Fund Balance (Infrastructure Reserve) This action adjusts the fund balance to offset adjustments recommended in this report.
-$ (6,347,550)$
CAPITAL IMPROVEMENT FUND (471) SUBTOTAL 0.00 827,527$ 827,527$

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 PROPOSED BUDGET Item 28
Attachment A Exhibit 2
and 3 - Amendments to
the City Manager's Fiscal
Year 2025 Proposed
Operating and Capital
Budgets.pdf

Item 28: Staff Report
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ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment

CAPITAL IMPROVEMENT FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 PROPOSED BUDGET CUBBERLEY INFRASTRUCTURE FUND (472)
Capital Capital Improvement Project Amendments to Proposed Reappropriations
This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below.
-$ 1,031,944$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
-$ (1,031,944)$
CUBBERLEY INFRASTRUCTURE FUND (472) SUBTOTAL 0.00 -$ -$ Item 28
Attachment A Exhibit 2
and 3 - Amendments to
the City Manager's Fiscal
Year 2025 Proposed
Operating and Capital
Budgets.pdf

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ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment

ENTERPRISE FUNDS
AIRPORT FUND (530)
Capital Capital Improvement Project Amendments to Proposed Reappropriations
This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below.
22,500$ 25,000$
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $18,000)
-$ 9,345$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
-$ (11,845)$
AIRPORT FUND (530) SUBTOTAL 0.00 22,500$ 22,500$ UTILITIES ADMINISTRATION FUND (521)
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Savings: $7,000)
-$ (3,364)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
-$ 3,364$
UTILITIES ADMINISTRATION FUND (521) SUBTOTAL 0.00 -$ -$ ELECTRIC FUND (513 & 523)
Capital Capital Improvement Project Amendments to Proposed Reappropriations
This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below.
-$ 8,727,930$
Utilities Associate Sustainability Program Administrator This action adds 1.0 FTE Associate Sustainability Program Administrator to the Utilities Resource Management Division. This fulfills the Council's Climate Action priority by supporting programs to drive gas appliance conversion to electricity and electric vehicle adoption, both of which reduce emissions supporting the City's green electricity portfolio. (Ongoing Costs: $155,000)

1.00 -$ 148,819$
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $556,000)
-$ 277,742$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
-$ (9,154,491)$
ELECTRIC FUND (513 & 523) SUBTOTAL 1.00 -$ -$

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 PROPOSED BUDGET Item 28
Attachment A Exhibit 2
and 3 - Amendments to
the City Manager's Fiscal
Year 2025 Proposed
Operating and Capital
Budgets.pdf

Item 28: Staff Report
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ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment

ENTERPRISE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 PROPOSED BUDGET FIBER FUND (533)
Capital Capital Improvement Project Amendments to Proposed Reappropriations
This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below.
-$ 6,355,164$
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Savings: $6,000)
-$ (3,028)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
-$ (6,352,136)$
FIBER FUND (533) SUBTOTAL 0.00 -$ -$
GAS FUND (514 & 524)
Capital Capital Improvement Project Amendments to Proposed Reappropriations
This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below.
-$ 4,690,727$
Capital Gas Main Replacements #25 (GS-15000)
To mitigate further rate increases related to the Gas Fund equity transfer and to maintain a sufficient reserve balance, this action reduces the project's FY 2025 budget by $735,000.
-$ (735,000)$
Utilities Gas Fund Equity Transfer
Consistent with Council direction, this action increases the Gas Fund equity transfer to the General Fund from 11.9% to 14.5%, an increase of approximately $2.0 million. This is offset by an increase to retail revenues by approximately $2.0 million, supported by an increase to the gas rate in FY 2025 from 9.0% in the proposed budget to 12.5%. (Ongoing Costs: $916,000, FY 2026 Only) 1,958,000$ 1,958,000$
Utilities Water System Operations Staffing
This action removes the Water System Operations Staffing Proposal from the FY 2025 Proposed Budget to allow time for discussions with the Service Employee International Union (SEIU).

The proposal sought to reclassify four Water System Operator II’s and two Senior Water System Operators into four Utilities Install/Repairers and two Utility Install/Repairer Leads, respectively. (Ongoing Costs: $10,000)

0.00 -$ 5,359$
Item 28
Attachment A Exhibit 2
and 3 - Amendments to
the City Manager's Fiscal
Year 2025 Proposed
Operating and Capital
Budgets.pdf

Item 28: Staff Report
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ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment

ENTERPRISE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 PROPOSED BUDGET Various Other Post-Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $274,000)
-$ 136,926$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
-$ (4,098,012)$
GAS FUND (514 & 524) SUBTOTAL 0.00 1,958,000$ 1,958,000$ REFUSE FUND (525)
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $96,000)
-$ 47,695$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
-$ (47,695)$
REFUSE FUND (525) SUBTOTAL 0.00 -$ -$ STORMWATER MANAGEMENT FUND (528)
Capital Capital Improvement Project Amendments to Proposed Reappropriations
This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below.
-$ 5,822,454$
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $72,000)
-$ 36,272$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
-$ (5,858,726)$
STORMWATER MANAGEMENT FUND (528) SUBTOTAL 0.00 -$ -$ WASTEWATER COLLECTION FUND (527)
Capital Capital Improvement Project Amendments to Proposed Reappropriations
This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below.
-$ 40,000$
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Savings: $150,000)
-$ (74,921)$
Item 28
Attachment A Exhibit 2
and 3 - Amendments to
the City Manager's Fiscal
Year 2025 Proposed
Operating and Capital
Budgets.pdf

Item 28: Staff Report
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ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment

ENTERPRISE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 PROPOSED BUDGET Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
-$ 34,921$
WASTEWATER COLLECTION FUND (527) SUBTOTAL 0.00 -$ -$ WASTEWATER TREATMENT FUND (526)
Capital Capital Improvement Project Amendments to Proposed Reappropriations
This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below.
35,169,981$ 42,178,642$
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $590,000)
-$ 295,490$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
-$ (7,304,151)$
WASTEWATER TREATMENT FUND (526) SUBTOTAL 0.00 35,169,981$ 35,169,981$ WATER FUND (522)
Capital Capital Improvement Project Amendments to Proposed Reappropriations
This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below.
-$ 5,632,547$
Utilities Water System Operations Staffing
This action removes the Water System Operations Staffing Proposal from the FY 2025 Proposed Budget to allow time for discussions with the Service Employee International Union (SEIU).

The proposal sought to reclassify four Water System Operator II’s and two Senior Water System Operators into four Utilities Install/Repairers and two Utility Install/Repairer Leads, respectively. (Ongoing Savings: $50,000)

0.00 -$ (43,098)$
Utilities Water Rates Decrease
In accordance with the FY 2025 Water Fund Financial Plan, this action reduces the annual water rate increase from 10.0% to 9.5%, reducing revenue by $297,381. (Ongoing Savings: $0)
(297,381)$ -$
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $152,000)
-$ 75,809$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
-$ (5,962,639)$
WATER FUND (522) SUBTOTAL 0.00 (297,381)$ (297,381)$ Item 28
Attachment A Exhibit 2
and 3 - Amendments to
the City Manager's Fiscal
Year 2025 Proposed
Operating and Capital
Budgets.pdf

Item 28: Staff Report
Pg.
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ATTACHMENT A, EXHIBIT 2
Revenues Expenses
Department Adjustment Adjustment

SPECIAL REVENUE FUNDS
PARKS DEVELOPMENT IMPACT FEE FUND (210)
Non-
Departmental
Transfer to Capital Improvement Fund
This action reduces the transfer to the Capital Improvement Fund as a result of recommended adjustments to capital project reappropriations from FY 2024 to FY 2025.
-$ (1,851)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset the actions recommended in this report.
-$ 1,851$
PARKS DEVELOPMENT IMPACT FEE FUND (210) SUBTOTAL -$ -$ GAS TAX FUND (231)
Non-
Departmental
Gas Tax Revenue Increase/ Transfer to Capital Improvement Fund for Street Maintenance (PE-86070)
This action increases Gas Tax revenue estimates and increases transfers to the CIP for the Street Maintenance Project (PE-86070) based on the California Department of Finance's May 2024 updates for estimated 2024-25 HUTA and RMRA-SB1 taxes.
79,378$ 79,378$
GAS TAX FUND (231) SUBTOTAL 79,378$ 79,378$
CALIFORNIA AVENUE PARKING PERMITS FUND (237)
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $1,000)
-$ 574$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset the actions recommended in this report.
-$ (574)$
CALIFORNIA AVENUE PARKING PERMITS FUND (237) SUBTOTAL -$ -$ RESIDENTIAL PARKING PERMIT PROGRAMS FUND (239)
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $2,000)
-$ 1,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset the actions recommended in this report.
-$ (1,000)$
RESIDENTIAL PARKING PERMIT PROGRAMS FUND (239) SUBTOTAL -$ -$

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 PROPOSED BUDGET Item 28
Attachment A Exhibit 2
and 3 - Amendments to
the City Manager's Fiscal
Year 2025 Proposed
Operating and Capital
Budgets.pdf

Item 28: Staff Report
Pg.
32 Packet Pg. 598 of 946

ATTACHMENT A, EXHIBIT 2
Revenues Expenses
Department Adjustment Adjustment

SPECIAL REVENUE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 PROPOSED BUDGET UNIVERSITY AVENUE PARKING PERMITS FUND (236)
Office Of
Transportation
Palo Alto Transportation Management Authority (PATMA)
Funding This ongoing action increases the allocation for PATMA by $200,000, from $200,000 to $400,000, to maintain current service levels, with $25,000 funded by the University Avenue Parking Fund and $175,000 supported by the General Fund. Previously, PATMA spent down reserves to maintain service levels and has exhausted those funds. (Ongoing Costs: $25,000)
-$ 25,000$
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $5,000)
-$ 2,413$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset the actions recommended in this report.
-$ (27,413)$
UNIVERSITY AVENUE PARKING PERMITS FUND (236) SUBTOTAL -$ -$ Item 28
Attachment A Exhibit 2
and 3 - Amendments to
the City Manager's Fiscal
Year 2025 Proposed
Operating and Capital
Budgets.pdf

Item 28: Staff Report
Pg.
33 Packet Pg. 599 of 946

ATTACHMENT A, EXHIBIT 2
Revenues Expenses
Department Adjustment Adjustment

INTERNAL SERVICE FUNDS
GENERAL BENFITS FUND (687)
Non-Departmental Charges to Other Funds / Healthcare and Pension Expense This net neutral action increases the estimate for charges to other funds by $1.6 million due to staffing increases approved as part of the FY 2025 Adopted Budget. During budget hearings, the Finance Committee recommended staffing adjustments to the FY 2025 Proposed Budget in addition to the staffing adjustments included in the FY 2025 Proposed Budget. The General Benefits Fund acts as a pass-through for pension and healthcare costs; therefore this action increases expenditures correspondingly.
1,573,612$ 1,573,612$
Non-Departmental Other Post-Employment Benefits (OPEB) Actuarial Valuation Transfer for Implied Subsidy. A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. -$ (254,500)$
Non-Departmental Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
-$ 254,500$
GENERAL BENFITS FUND (687) SUBTOTAL 1,573,612$ 1,573,612$ RETIREE HEALTH BENEFITS FUND (694)
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation On June 4, 2024, the Finance Committee approved the June 30, 2023 actuarial valuation of Palo Alto's Retiree Healthcare Plan (CMR 2402-2673). This action results in an FY 2025 Adjusted ADC of $19.4 million citywide (approximately $12.2 million in the General Fund), a $2.6 million ($1.7 million in the General Fund) increase from the $16.8 million ADC from the June 30, 2021 valuation used to develop the FY 2025 Proposed Operating Budget. A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1.
2,603,214$ 2,603,214$
Non-Departmental Other Post-Employment Benefits (OPEB) Actuarial Valuation Transfer for Implied Subsidy. A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (254,500)$ (254,500)$
RETIREE HEALTH BENEFITS FUND (694) SUBTOTAL 2,348,714$ 2,348,714$

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 PROPOSED BUDGET Item 28
Attachment A Exhibit 2
and 3 - Amendments to
the City Manager's Fiscal
Year 2025 Proposed
Operating and Capital
Budgets.pdf

Item 28: Staff Report
Pg.
34 Packet Pg. 600 of 946

ATTACHMENT A, EXHIBIT 2
Revenues Expenses
Department Adjustment Adjustment

INTERNAL SERVICE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 PROPOSED BUDGET PRINTING & MAILING FUND (683)
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation Transfer for Implied Subsidy. A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $10,000)
-$ 5,296$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
-$ (5,296)$
PRINTING & MAILING FUND (683) SUBTOTAL -$ -$ TECHNOLOGY FUND (682)
Capital Capital Improvement Project Amendments to Proposed Reappropriations
This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3. -$ 1,274,731$
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $142,000)
-$ 71,067$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
-$ (1,345,798)$
TECHNOLOGY FUND (682) SUBTOTAL -$ -$
VEHICLE REPLACEMENT & MAINTENANCE FUND (681)
Capital Capital Improvement Project Amendments to Proposed Reappropriations
This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2024 to FY 2025, as outlined in Attachment A, Exhibit 3.

Projects with other recommended adjustments are detailed below.
-$ (290,553)$
Various Other Post-Employment Benefits (OPEB) Actuarial Valuation A detailed list of impacts by department and fund can be found in Attachment D, Exhibit 1. (Ongoing Costs: $40,000)
-$ 20,134$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
-$ 270,419$
-$ -$ VEHICLE REPLACEMENT & MAINTENANCE FUND (681) SUBTOTAL Item 28
Attachment A Exhibit 2
and 3 - Amendments to
the City Manager's Fiscal
Year 2025 Proposed
Operating and Capital
Budgets.pdf

Item 28: Staff Report
Pg.
35 Packet Pg. 601 of 946

Capital Improvement Plan FY 2024 Reappropriations to FY 2025 ATTACHMENT A, EXHIBIT 3 Fund Number and Name Project Title Project #
Expense
Reappropriation
Adjustment
(Proposed)
Expense
Reappropriation
Adjustment
(A2P)
Expense
Reappropriation
Adjustment
TOTAL
Revenue
Reappropriation
Adjustment
(Proposed)
Revenue
Reappropriation
Adjustment (A2P)
Revenue
Reappropriation
Adjustment
TOTAL
471 - Capital Improvement Fund Americans With Disabilities Act Compliance PF-93009 800,000 800,000 Animal Shelter Renovation PE-19002 2,712,807 2,712,807 Art In Public Spaces AC-86017 1,637,708 1,637,708 Athletic Courts Resurfacing PG-06001 202,644 (28,617) 174,027 Baylands Comprehensive Conservation Plan PG-17000 43,100 43,100 Baylands Nature Preserve Entrance Gate OS-24000 120,000 (22,538) 97,462 Benches, Signage, Walkways, Perimeter Landscaping,
and Site Amenities
PG-06003 128,021 128,021
Bicycle and Pedestrian Transportation Plan
Implementation PL-04010 2,900,000 2,900,000
Boulware Park Improvements PE-17005 135,764 135,764 Building Systems Improvements PF-01003 100,000 100,000 California Avenue District Gateway Signs PE-17004 123,382 123,382 Churchill Avenue Enhanced Bikeway PL-14000 2,000,000 2,000,000 City Bridge Improvements PE-20001 1,140,612 79,476 1,220,088 City Facilities Assessment PE-20002 30,000 30,000 City Facility Parking Lot Maintenance PE-09003 240,487 240,487 City Hall Space Planning PE-19000 571,373 571,373 Civic Center Electrical Upgrade & EV Charger PE-17010 1,035,399 1,035,399 Civic Center Fire Life Safety Upgrades PE-18016 147,239 (6,310) 140,929 Civic Center Waterproofing Study and Repairs PE-15020 426,969 426,969 Downtown Automated Parking Guidance Systems,
Access Controls & Revenue Collection Equip.

PL-15002 63,528 (6,130) 57,398 Electric Charger Infrastructure Installation PF-23000 241,799 (143,773) 98,026 Electrification of City Facilities PE-24001 491,474 491,474 Facility Interior Finishes Replacement PF-02022 20,000 20,000 Fire Station 4 Replacement PE-18004 8,107,006 (47,351) 8,059,655 Foothills Nature Preserve Boronda Lake Dock OS-18000 210,000 210,000 Foothills Nature Preserve Dam Seepage Investigation
and Repairs
PE-20000 75,066 75,066
Foothills Nature Preserve Improvements PE-21000 692,744 692,744 Golf Course Net and Artificial Turf Replacement PG-18000 770,000 770,000 Golf Reconfiguration & Baylands Athletic Center
Improvements PG-13003 87,150 87,150
Homekey Facilities PE-24005 4,401,987 4,401,987 JMZ Renovation AC-18001 531,623 44,892 576,515 Library Automated Material Handling LB-21000 382,983 19 383,002 382,983 382,983 Lucie Stern Community Theater Mechanical
Equipment Replacement PE-24002 199,834 199,834 Lucie Stern Community Theatre Fire Curtain AC-24001 200,000 200,000 Lucie Stern Community Theatre Theatrical and House
Lighting System Replacement PE-24003 26,350 26,350 Mitchell Park Library Repair PE-24006 163,730 (1,654) 162,076 Municipal Service Center Lighting, Mechanical, and
Electrical Improvements
PF-16006 6,365,504 6,365,504 500,000 500,000 New California Avenue Area Parking Garage PE-18000 735,018 (2,758) 732,260 New Downtown Parking Garage PE-15007 5,398,600 (297,242) 5,101,358 5,398,600 5,398,600 New Public Safety Building PE-15001 1,454,374 1,454,374 Newell Road/San Francisquito Creek Bridge PE-12011 14,016,235 (359,800) 13,656,435 9,800,000 9,800,000 Off-Road Pathway Resurfacing And Repair OS-09001 244,733 244,733 Open Space Lakes And Pond Maintenance OS-00002 27,169 27,169 Open Space Trails and Amenities OS-00001 71,651 71,651 Park and Open Space Emergency Repairs PG-09002 53,687 53,687 Park Restroom Installation PG-19000 631,421 (1,851) 629,570 631,421 (1,851) 629,570 Parking District Implementation PL-15003 163,900 163,900 Performing Arts Venues Seat Replacement AC-18000 339,976 (166,990) 172,986 Rinconada Pool Family Changing Room PE-24004 200,070 200,070 Robles Park Improvements PE-18015 192,248 446,308 638,556 Roth Building Rehabilitation Phase 1 PF-23001 245,974 (7,928) 238,046 Safe Routes To School PL-00026 500,000 500,000 Sidewalk Repairs PO-89003 139,390 (139,390) - Street Lights Condition Assessment PE-13014 220,000 220,000 Street Lights Improvements PO-05054 366,950 (4,541) 362,409 Street Maintenance PE-86070 146,154 (56,466) 89,688 University Avenue Parking Improvements PF-14003 155,416 155,416 Baylands Interpretive Signage Program OS-24001 162,000 162,000 162,000 162,000 471 - Capital Improvement Fund
Total 56,180,015 6,088,590 62,268,605 16,875,004 (1,851) 16,873,153 472 - Cubberley Property Cubberley Field Restroom CB-17002 137,828 510,848 648,676 Cubberley Gym HVAC Replacement CB-24000 770,000 30,000 800,000 Cubberley Repairs CB-17001 491,096 491,096 Cubberley Roof Replacements CB-16002 400,000 400,000 472 - Cubberley Property
Infrastructure Fund Total 1,307,828 1,031,944 2,339,772 Item 28
Attachment A Exhibit 2
and 3 - Amendments to
the City Manager's Fiscal
Year 2025 Proposed
Operating and Capital
Budgets.pdf

Item 28: Staff Report
Pg.
36 Packet Pg. 602 of 946

Capital Improvement Plan FY 2024 Reappropriations to FY 2025 ATTACHMENT A, EXHIBIT 3 Fund Number and Name Project Title Project #
Expense
Reappropriation
Adjustment
(Proposed)
Expense
Reappropriation
Adjustment
(A2P)
Expense
Reappropriation
Adjustment
TOTAL
Revenue
Reappropriation
Adjustment
(Proposed)
Revenue
Reappropriation
Adjustment (A2P)
Revenue
Reappropriation
Adjustment
TOTAL
530 - Airport Enterprise Fund Airport Access Road Reconstruction AP-24000 300,000 300,000 270,000 270,000 Airport Parking Lot Electric Vehicle Charger AP-24001 25,000 25,000 22,500 22,500 Airport Temporary Office Buildings AP-22001 358,800 358,800 Airport Zero Emission Vehicle Fleet Replacement AP-23000 156,647 156,647 156,647 156,647 Automated Weather Observation System (AWOS) AP-19000 341,839 341,839 341,839 341,839 530 - Airport Enterprise Fund 1,157,286 25,000 1,182,286 768,486 22,500 790,986 523 - Electric Fund Colorado Power Station Equipment Upgrades EL-19001 1,733,011 1,733,011 Colorado Substation Site Improvements EL-19002 1,138,294 1,138,294 Foothills Rebuild (Fire Mitigation) EL-21001 1,742,878 460,974 2,203,852 Grid Modernization for Electrification EL-24000 15,000,000 3,182,640 18,182,640 15,000,000 15,000,000 Inter-substation Line Protection Relay EL-17005 462,505 462,505 Rebuild Underground District 24 EL-10006 139,066 139,066 Smart Grid Technology Installation EL-11014 710,177 297,572 1,007,749 Substation Breaker Replacement EL-17002 1,137,480 1,209,854 2,347,334 Substation Physical Security EL-16003 2,812,575 104,014 2,916,589 523 - Electric Fund Total 21,403,110 8,727,930 30,131,040 15,000,000 15,000,000 533 - Fiber Optics Fund Fiber Optics Network - System Improvements FO-10001 400,000 400,000 Fiber Optics Network - System Rebuild FO-16000 12,314,530 30,000 12,344,530 Fiber-to-the-Premises (FTTP) FO-24000 5,925,164 5,925,164 533 - Fiber Optics Fund Total 12,314,530 6,355,164 18,669,694 524 - Gas Fund Gas Distribution System Improvements GS-11002 666,723 666,723 Gas Main Replacement - Project 24 GS-14003 567,190 131,610 698,800 Gas Main Replacement - Project 25 GS-15000 3,703,849 3,703,849 Gas Meters and Regulators GS-80019 188,545 188,545 524 - Gas Fund Total 567,190 4,690,727 5,257,917 528 - Stormwater Management Corporation Way System Upgrades and Pump Station SD-21000 3,526,712 3,526,712 East Meadow Circle Connection to Adobe Creek
Pump Station
SD-26000 134,487 134,487
East Meadow Drive System Upgrades SD-22000 88,231 88,231 Green Stormwater Infrastructure SD-22001 1,655,538 (42,070) 1,613,468 Storm Drainage System Replacement And SD-06101 600,000 188,164 788,164 West Bayshore Road Pump Station SD-20000 1,038,809 1,038,809 West Bayshore Road Trunk Line Improvements SD-23000 888,121 888,121 528 - Stormwater Management
Fund Total 2,255,538 5,822,454 8,077,992 527 - Wastewater Collection Fund Wastewater General Equipment and Tools WC-13002 40,000 40,000 527 - Wastewater Collection Fund
Total
40,000 40,000
526 - Wastewater Treatment
Fund
Headworks Facility Replacement WQ-16002 2,638,974 372,915 3,011,889 Horizontal Levee Pilot WQ-22001 246,666 (170,431) 76,235 Joint Intercepting Sewer Rehabilitation (Phase 1) WQ-24000 3,565,030 28,890 3,593,920 3,565,030 28,890 3,593,920 Outfall Line Construction WQ-19000 10,605,800 10,605,800 Plant Repair, Retrofit, and Equipment Replacement WQ-19002 5,057,207 4,816,716 9,873,923 Primary Sedimentation Tank Rehabilitation WQ-14003 1,000,000 1,989,461 2,989,461 Secondary Treatment Upgrades WQ-19001 1,132,679 34,996,091 36,128,770 1,132,679 34,996,091 36,128,770 Local Advanced Water Purification System WQ-19003 16,981,395 145,000 17,126,395 16,981,395 145,000 17,126,395 526 - Wastewater Treatment
Fund Total
41,227,751 42,178,642 83,406,393 21,679,104 35,169,981 56,849,085 522 - Water Fund Water Distribution System Improvements WS-11003 670,388 670,388 Water General Equipment/Tools WS-13002 50,000 50,000 Water Main Replacement - Project 29 WS-15002 3,089,102 3,089,102 Water Main Replacement - Project 30 WS-16001 415,000 415,000 Water Regulation Station Improvements WS-07000 18,519 18,519 Water System Supply Improvements WS-11004 2,817,000 601,706 3,418,706 Water Tank Seismic Upgrade and Rehabilitation WS-09000 737,832 737,832 Water, Gas, Wastewater Utility GIS Data WS-02014 50,000 50,000 522 - Water Fund Total 2,817,000 5,632,547 8,449,547 682 - Technology Fund City Council Chambers Upgrade TE-19001 1,770,910 (10,000) 1,760,910 Computer Aided Dispatch (CAD) Upgrade TE-23000 640,000 640,000 Enterprise Resource Planning Upgrade TE-19000 530,620 (10,620) 520,000 Infrastructure Management System TE-13004 361,874 361,874 Radio Infrastructure Replacement TE-05000 259,900 259,900 Utilities Customer Bill System Improvements TE-10001 293,477 293,477 682 - Technology Fund Total 2,561,430 1,274,731 3,836,161 681 - Vehicle Replacement &
Maintenance Fund Emergency Repair and Replacement VR-15001 39,662 39,662 Scheduled Vehicle and Equipment Replacement - FY VR-20000 30,000 30,000 Scheduled Vehicle and Equipment Replacement - FY VR-21000 17,351 17,351 Scheduled Vehicle and Equipment Replacement - FY VR-23000 873,477 (144,146) 729,331 Scheduled Vehicle and Equipment Replacement - FY VR-24000 4,364,538 (186,069) 4,178,469 681 - Vehicle Replacement &
Maintenance Fund Total 5,285,366 (290,553) 4,994,813 All Funds Total 147,077,044 81,577,176 228,654,220 54,322,594 35,190,630 89,513,224 Item 28
Attachment A Exhibit 2
and 3 - Amendments to
the City Manager's Fiscal
Year 2025 Proposed
Operating and Capital
Budgets.pdf

Item 28: Staff Report
Pg.
37 Packet Pg. 603 of 946

TABLE OF ORGANIZATION
Table of Organization
FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
General Fund
Administrative Services
Account Specialist 4.13 4.13 4.13 4.13 — —%
Account Specialist-Lead 3.45 3.45 3.45 3.45 — —%
Accountant 2.00 2.00 2.00 2.00 — —%
Administrative Assistant 1.00 1.00 1.00 1.00 — —%
Administrative Associate II 0.50 0.50 1.00 1.00 — —%
Administrative Associate III 1.00 1.00 1.00 1.00 — —%
Assistant Director Administrative Services 1.65 1.65 1.65 1.65 — —% Buyer 2.00 2.00 2.00 2.00 — —%
Chief Procurement Officer 1.00 1.00 1.00 1.00 — —%
Contracts Administrator 1.70 2.70 3.70 3.70 — —%
Director Administrative Services/CFO 0.80 0.80 0.80 0.80 — —% Director Office of Management and Budget 1.00 1.00 1.00 1.00 — —% Management Analyst 2.00 2.00 2.00 3.00 1.00 50.0%
Manager Budget 2.00 2.00 2.00 2.00 — —%
Manager Real Property 1.00 1.00 1.00 1.00 — —%
Manager Revenue Collections 0.62 0.62 0.62 0.62 — —%
Manager Treasury, Debt & Investments 0.60 0.60 0.60 0.60 — —% Manager, Finance 1.00 1.00 1.00 1.00 — —%
Payroll Analyst 2.00 2.00 2.00 2.00 — —%
Senior Accountant 3.00 3.00 3.00 3.00 — —%
Senior Buyer 1.00 1.00 1.00 1.00 — —%
Senior Management Analyst 2.30 2.30 2.30 2.30 — —%
Storekeeper 1.00 2.00 2.00 2.00 — —%
Storekeeper-Lead 0.20 0.20 0.20 0.20 — —%
Attachment A, Exhibit 4
Item 28
Attachment A Exhibit 4 -
Table of Organization.pdf

Item 28: Staff Report
Pg.
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TABLE OF ORGANIZATION
Warehouse Supervisor 0.20 0.20 0.20 0.20 — —%
Total Administrative Services 37.15 39.15 40.65 41.65 1.00 2.5% City Attorney
Assistant City Attorney 3.00 4.00 4.00 4.00 — —%
Chief Assistant City Attorney 1.00 1.00 1.00 1.00 — —%
City Attorney 1.00 1.00 1.00 1.00 — —%
Claims Investigator 1.00 1.00 1.00 1.00 — —%
Deputy City Attorney 1.00 — 0.50 0.50 — —%
Legal Fellow 1.00 1.00 1.00 1.00 — —%
Secretary to City Attorney 1.00 1.00 1.00 1.00 — —%
Senior Management Analyst 1.00 1.00 1.00 1.00 — —%
Total City Attorney 10.00 10.00 10.50 10.50 — —%
City Auditor
City Clerk
Administrative Associate III 2.00 2.00 2.00 2.00 — —%
Assistant City Clerk 1.00 1.00 2.00 2.00 — —%
City Clerk 1.00 1.00 1.00 1.00 — —%
Deputy City Clerk 1.00 1.00 — — — —%
Total City Clerk 5.00 5.00 5.00 5.00 — —%
City Manager
Administrative Assistant 2.00 2.00 3.00 3.00 — —%
Assistant City Manager 1.00 1.00 1.00 1.00 — —%
Assistant to the City Manager 1.00 3.00 3.00 3.00 — —%
Chief Communications Officer 1.00 1.00 1.00 1.00 — —%
City Manager 1.00 1.00 1.00 1.00 — —%
Deputy City Manager 1.00 1.00 1.00 1.00 — —%
FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
Attachment A, Exhibit 4
Item 28
Attachment A Exhibit 4 -
Table of Organization.pdf

Item 28: Staff Report
Pg.
39 Packet Pg. 605 of 946

TABLE OF ORGANIZATION
Executive Assistant to the City Manager 1.00 1.00 1.00 1.00 — —% Management Fellow** — — — 1.00 1.00 —%
Manager Communications 1.00 1.00 1.00 1.00 — —%
Senior Management Analyst — 1.00 1.00 1.00 — —%
Total City Manager 9.00 12.00 13.00 14.00 1.00 7.7%
Community Services
Administrative Assistant 1.00 1.00 1.00 1.00 — —%
Animal Caretaker**,*** — — — 4.00 4.00 —%
Assistant Director Community Services 1.00 1.00 2.00 2.00 — —% Building Serviceperson 1.00 1.00 2.00 2.00 — —%
Building Serviceperson-Lead 0.60 0.60 2.00 2.00 — —%
Coordinator Recreation Programs 4.00 4.00 5.75 5.75 — —% Director Community Services 1.00 1.00 1.00 1.00 — —%
Division Manager Open Space, Parks & Golf — — 1.00 1.00 — —% Inspector, Field Services 2.00 2.00 2.00 2.00 — —%
Junior Museum & Zoo Educator 3.25 4.10 4.85 4.85 — —%
Management Analyst 1.00 1.00 1.00 1.00 — —%
Management Assistant 1.00 1.00 1.00 1.00 — —%
Manager Community Services 5.00 5.00 5.00 5.00 — —%
Manager Community Services Senior Program 4.00 4.00 4.00 4.00 — —% Manager Human Services 1.00 1.00 1.00 1.00 — —%
Park Maintenance Person 6.00 6.00 6.00 6.00 — —%
Park Maintenance-Lead 1.00 1.00 1.00 1.00 — —%
Park Ranger 5.00 6.00 6.00 6.00 — —%
Parks/Golf Crew-Lead 2.00 2.00 2.00 2.00 — —%
Producer Arts/Science Program 11.00 12.25 9.50 9.50 — —% Program Assistant I*** 3.00 3.00 3.75 4.75 1.00 26.7%
FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
Attachment A, Exhibit 4
Item 28
Attachment A Exhibit 4 -
Table of Organization.pdf

Item 28: Staff Report
Pg.
40 Packet Pg. 606 of 946

TABLE OF ORGANIZATION
Program Assistant II 4.00 4.00 4.00 4.00 — —%
Project Manager 0.10 0.10 0.10 0.10 — —%
Senior Management Analyst 1.00 1.00 1.00 1.00 — —%
Sprinkler System Representative 4.00 4.00 4.00 4.00 — —% Superintendent Community Services 2.00 2.00 2.00 2.00 — —% Theater Specialist 2.00 2.00 5.00 5.00 — —%
WGW Heavy Equipment Operator 0.07 0.07 0.07 0.07 — —%
Total Community Services 67.02 70.12 78.02 83.02 5.00 6.4% Fire
40-Hour Captain — 0.20 0.20 — (0.20) (100.0)%
40-Hour Training Battalion Chief 1.00 1.00 1.00 1.00 — —% 40-Hour Training Captain 1.00 1.00 1.00 1.00 — —%
Administrative Assistant 1.00 1.00 1.00 1.00 — —%
Administrative Associate II 2.20 2.20 2.20 3.00 0.80 36.4% Administrative Associate III — 0.20 0.20 1.00 0.80 400.0% Assistant Fire Marshal — — — 1.00 1.00 —%
Battalion Chief 3.00 3.00 3.00 3.00 — —%
Business Analyst 0.80 0.80 0.80 0.80 — —%
Deputy Chief/Fire Marshal 0.05 — — — — —%
Deputy Director Technical Services Division — 0.20 0.20 0.20 — —% Deputy Fire Chief 1.00 2.00 2.00 2.00 — —%
Emergency Medical Service Director 1.00 1.00 1.00 1.00 — —% Emergency Medical Services Data Specialist 1.00 1.00 1.00 1.00 — —% Fire Apparatus Operator 26.00 26.00 26.00 26.00 — —%
Fire Captain 20.00 20.00 20.00 20.00 — —%
Fire Chief 1.00 1.00 1.00 1.00 — —%
Fire Fighter*** 29.00 34.00 34.00 37.00 3.00 8.8%
FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
Attachment A, Exhibit 4
Item 28
Attachment A Exhibit 4 -
Table of Organization.pdf

Item 28: Staff Report
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TABLE OF ORGANIZATION
Fire Fighter Trainee — 3.00 3.00 3.00 — —%
Fire Inspector 0.40 0.40 2.40 3.20 0.80 33.3%
Fire Marshal — 0.05 0.05 0.75 0.70 1,400.0%
Geographic Information System Specialist 0.50 0.50 0.50 0.50 — —% Hazardous Materials Inspector 0.30 0.70 0.70 3.93 3.23 461.4% Plans Check Engineer — — — 0.50 0.50 —%
Senior Management Analyst 1.00 1.00 1.00 1.00 — —%
Total Fire 90.25 100.25 102.25 112.88 10.63 10.4%
Human Resources
Administrative Assistant — — 0.75 0.75 — —%
Assistant Director Human Resources 1.00 1.00 1.00 1.00 — —% Director Human Resources/CPO 1.00 1.00 1.00 1.00 — —%
Human Resources Representative 2.00 2.00 4.00 4.00 — —% Human Resources Technician 3.00 4.00 2.00 2.00 — —%
Manager Employee Benefits 1.00 1.00 1.00 1.00 — —%
Manager Employee Relations 1.00 1.00 1.00 1.00 — —%
Recruitment Division Manager — — — 1.00 1.00 —%
Senior Human Resources Administrator 3.00 3.00 4.00 4.00 — —% Senior Management Analyst 2.00 2.00 2.00 2.00 — —%
Total Human Resources 14.00 15.00 16.75 17.75 1.00 6.0% Library
Administrative Assistant — — 1.00 1.00 — —%
Administrative Associate III — 1.00 — — — —%
Assistant Director Library Services — 1.00 — — — —%
Business Analyst 1.00 1.00 — — — —%
Coordinator Library Programs 1.00 2.00 5.00 5.00 — —%
FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
Attachment A, Exhibit 4
Item 28
Attachment A Exhibit 4 -
Table of Organization.pdf

Item 28: Staff Report
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TABLE OF ORGANIZATION
Director Libraries 1.00 1.00 1.00 1.00 — —%
Division Head Library Services 1.00 1.00 2.00 2.00 — —% Librarian 6.00 7.00 4.00 4.00 — —%
Library Associate 6.00 6.00 10.00 10.00 — —%
Library Specialist 10.50 12.50 8.00 8.00 — —%
Management Analyst 1.00 1.00 1.00 1.00 — —%
Manager Library Services 3.00 3.00 3.00 3.00 — —%
Senior Business Analyst — — 1.00 1.00 — —%
Senior Librarian 6.00 6.00 8.00 8.00 — —%
Supervising Librarian 4.00 4.00 5.00 5.00 — —%
Total Library 40.50 46.50 49.00 49.00 — —%
Office of Emergency Services
Director Office of Emergency Services 1.00 1.00 1.00 1.00 — —% Office of Emergency Services Coordinator 1.00 1.00 2.00 2.00 — —% Total Office of Emergency Services 2.00 2.00 3.00 3.00 — —% Office of Transportation
Administrative Assistant 0.60 0.60 0.60 0.60 — —%
Associate Engineer 0.35 0.35 0.35 0.35 — —%
Associate Planner 0.40 0.40 0.40 1.40 1.00 250.0%
Chief Transportation Official 0.70 0.70 0.70 0.70 — —%
Coordinator Transportation Systems
Management

0.65 0.65 0.65 — (0.65) (100.0)%
Management Analyst 0.50 0.50 — — — —%
Parking Operations-Lead 0.05 0.05 0.05 0.05 — —%
Planner — — — 0.40 0.40 —%
Project Engineer 0.25 0.25 0.25 0.25 — —%
Senior Engineer 0.20 0.55 0.55 0.55 — —%
FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
Attachment A, Exhibit 4
Item 28
Attachment A Exhibit 4 -
Table of Organization.pdf

Item 28: Staff Report
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TABLE OF ORGANIZATION
Senior Management Analyst — — 0.50 0.50 — —%
Senior Planner 0.15 0.15 1.40 1.65 0.25 17.9%
Traffic Engineering-Lead 0.35 — — — — —%
Transportation Planning Manager 1.00 1.00 1.00 1.00 — —% Total Office of Transportation 5.20 5.20 6.45 7.45 1.00 15.5% Planning and Development Services
40-Hour Captain — 0.80 0.80 — (0.80) (100.0)%
Administrative Assistant 1.00 1.00 1.00 1.00 — —%
Administrative Associate I 1.00 1.00 — — — —%
Administrative Associate II 2.80 2.80 0.80 — (0.80) (100.0)% Administrative Associate III 3.00 4.80 7.80 6.00 (1.80) (23.1)% Assistant Chief Building Official 1.00 2.00 2.00 1.00 (1.00) (50.0)% Assistant Director PCE 1.00 1.00 1.00 1.00 — —%
Associate Engineer — — 0.50 0.50 — —%
Associate Planner 3.25 1.25 1.25 1.25 — —%
Building Inspector Specialist 6.00 8.00 — — — —%
Building/Planning Technician 2.00 2.50 2.50 2.50 — —%
Chief Building Official 1.00 1.00 1.00 1.00 — —%
Chief Planning Official 1.00 1.00 1.00 — (1.00) (100.0)% Code Enforcement Officer — 1.00 1.00 1.00 — —%
Code Enforcement-Lead 1.00 1.00 1.00 1.00 — —%
Deputy Chief/Fire Marshal 0.80 — — — — —%
Development Project Coordinator II 2.00 2.00 2.00 2.00 — —% Development Project Coordinator III 3.00 3.00 3.00 3.00 — —% Director Planning/Community Environment 1.00 1.00 1.00 1.00 — —% Division Manager Planning — — — 1.00 1.00 —%
Engineer 0.52 0.52 0.52 0.52 — —%
FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
Attachment A, Exhibit 4
Item 28
Attachment A Exhibit 4 -
Table of Organization.pdf

Item 28: Staff Report
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TABLE OF ORGANIZATION
Engineering Technician III 1.50 1.50 1.00 1.00 — —%
Fire Inspector 1.60 1.60 1.60 0.80 (0.80) (50.0)%
Fire Marshal — 0.80 0.80 0.25 (0.55) (68.8)%
Hazardous Materials Inspector 1.60 3.20 3.20 0.07 (3.13) (97.8)% Industrial Waste Investigator 0.35 0.35 0.35 0.35 — —%
Inspector, Field Services 0.68 0.68 0.68 0.68 — —%
Landscape Architect Park Planner 0.50 0.50 0.50 0.50 — —% Manager Planning 4.00 4.00 4.00 4.00 — —%
Plan Review Manager — — — 1.00 1.00 —%
Planner 4.00 5.00 5.00 5.00 — —%
Plans Check Engineer — 1.00 1.00 0.50 (0.50) (50.0)%
Principal Planner 1.00 2.00 2.00 3.00 1.00 50.0%
Project Manager — 0.50 0.50 0.50 — —%
Senior Building Inspector — — 8.00 8.00 — —%
Senior Business Analyst 1.00 1.00 1.00 — (1.00) (100.0)% Senior Engineer 0.40 0.45 0.45 0.45 — —%
Senior Management Analyst 2.00 2.00 2.00 2.00 — —%
Senior Plan Check Engineer — — 2.00 3.00 1.00 50.0%
Senior Planner 3.65 4.65 7.65 8.75 1.10 14.4%
Senior Program Manager — — — 1.00 1.00 —%
Senior Technologist — — — 1.00 1.00 —%
Supervisor Inspection and Surveying 0.25 0.25 0.25 0.25 — —% Supervisor of Code Enforcement — — 1.00 1.00 — —%
Technologist — — — 1.00 1.00 —%
Traffic Engineering-Lead 0.05 — — — — —%
Transportation Planning Manager 0.05 0.05 0.05 0.05 — —% Total Planning and Development Services 54.00 65.20 71.20 67.92 (3.28) (4.6)% FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
Attachment A, Exhibit 4
Item 28
Attachment A Exhibit 4 -
Table of Organization.pdf

Item 28: Staff Report
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TABLE OF ORGANIZATION
Police
Administrative Assistant 1.00 1.00 1.00 1.00 — —%
Administrative Associate II 2.00 2.00 3.00 3.00 — —%
Animal Control Officer 2.00 2.00 2.00 2.00 — —%
Animal Control Officer-Lead 1.00 1.00 1.00 1.00 — —%
Assistant Police Chief 1.00 1.00 1.00 1.00 — —%
Business Analyst 1.20 2.20 2.20 2.20 — —%
Code Enforcement Officer 1.00 1.00 1.00 1.00 — —%
Community Service Officer 5.63 5.63 5.63 4.69 (0.94) (16.7)% Court Liaison Officer 1.00 1.00 2.00 2.00 — —%
Crime Analyst 1.00 1.00 1.00 1.00 — —%
Deputy Director Technical Services Division — 0.80 0.80 0.80 — —% Forensic Coordinator — — — 1.00 1.00 —%
Forensic Specialist — — — 1.00 1.00 —%
Geographic Information System Specialist 0.50 0.50 0.50 0.50 — —% Police Agent 19.00 19.00 19.00 19.00 — —%
Police Captain 2.00 2.00 2.00 2.00 — —%
Police Chief 1.00 1.00 1.00 1.00 — —%
Police Lieutenant 4.00 4.00 4.00 5.00 1.00 25.0%
Police Officer 39.00 43.00 45.00 45.00 — —%
Police Records Specialist II 6.00 6.00 6.00 6.00 — —%
Police Records Specialist-Lead 1.00 1.00 1.00 1.00 — —% Police Sergeant 14.00 14.00 14.00 14.00 — —%
Program Assistant II 1.00 1.00 1.00 1.00 — —%
Property Evidence Technician 2.00 2.00 2.00 — (2.00) (100.0)% Public Safety Communications Manager — 1.00 1.00 1.00 — —% Public Safety Dispatcher 12.00 14.00 16.00 16.00 — —%
FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
Attachment A, Exhibit 4
Item 28
Attachment A Exhibit 4 -
Table of Organization.pdf

Item 28: Staff Report
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TABLE OF ORGANIZATION
Public Safety Dispatcher-Lead 4.00 4.00 4.00 4.00 — —%
Public Safety Program Manager 1.00 1.00 1.00 1.00 — —%
Senior Management Analyst 1.00 1.00 1.00 1.00 — —%
Total Police 124.33 133.13 139.13 139.19 0.06 0.0%
Public Works
Administrative Assistant 0.50 0.50 0.50 0.50 — —%
Administrative Associate II 2.65 2.65 2.65 2.65 — —%
Assistant Director Public Works 0.73 0.73 0.73 0.73 — —% Associate Engineer — — 0.45 0.45 — —%
Building Serviceperson-Lead 1.00 1.00 1.00 1.00 — —%
Building/Planning Technician — 0.50 0.50 0.50 — —%
Cement Finisher 2.00 2.00 2.00 2.00 — —%
Cement Finisher-Lead 0.26 0.26 0.26 0.26 — —%
Coordinator Public Works Projects 1.50 1.50 1.50 1.50 — —% Director Public Works/City Engineer 1.00 1.00 1.00 1.00 — —% Electrician 0.80 0.80 0.80 0.80 — —%
Engineer 0.48 0.48 0.48 0.48 — —%
Engineering Technician III 1.75 1.75 1.80 1.80 — —%
Environmental Specialist — 0.33 0.33 0.33 — —%
Equipment Operator 2.46 2.46 2.46 2.46 — —%
Facilities Carpenter 1.00 1.00 1.00 1.00 — —%
Facilities Maintenance-Lead 1.85 1.85 1.85 1.85 — —%
Facilities Painter 1.75 1.75 1.75 1.75 — —%
Facilities Technician 4.05 4.05 5.05 5.05 — —%
Heavy Equipment Operator 2.10 2.10 2.10 2.10 — —%
Heavy Equipment Operator-Lead 0.85 0.85 0.85 0.85 — —%
Inspector, Field Services 0.11 0.11 0.11 0.11 — —%
FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
Attachment A, Exhibit 4
Item 28
Attachment A Exhibit 4 -
Table of Organization.pdf

Item 28: Staff Report
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TABLE OF ORGANIZATION
Landscape Architect Park Planner 0.60 0.60 0.60 0.60 — —% Management Analyst 1.45 0.70 0.70 0.80 0.10 14.3%
Manager Environmental Control Program — 0.33 0.33 0.33 — —% Manager Facilities 0.90 0.90 0.90 0.90 — —%
Manager Maintenance Operations 1.20 1.20 1.20 1.20 — —% Manager Urban Forestry 1.00 1.00 1.00 1.00 — —%
Manager Watershed Protection 0.05 0.05 0.05 0.05 — —%
Project Manager 2.00 2.50 2.85 2.85 — —%
Senior Engineer 0.60 0.60 0.60 0.60 — —%
Senior Management Analyst 1.11 1.11 1.11 1.11 — —%
Supervisor Inspection and Surveying 0.10 0.10 0.10 0.10 — —% Surveyor, Public Works 0.33 0.33 0.33 0.33 — —%
Traffic Controller Maintainer I 1.94 1.94 1.94 1.94 — —% Traffic Controller Maintainer II 1.00 1.00 1.00 1.00 — —% Tree Maintenance Person 1.00 1.00 1.00 1.00 — —%
Tree Trim/Line Clear 7.00 7.00 7.00 7.00 — —%
Tree Trim/Line Clear-Lead 1.00 1.00 1.00 1.00 — —%
WGW Heavy Equipment Operator 0.23 0.23 0.23 0.23 — —%
Total Public Works 48.35 49.26 51.11 51.21 0.10 0.2%
Total General Fund 506.80 552.81 586.06 602.57 16.51 2.8% Enterprise Fund
Public Works
Accountant 0.70 0.70 0.70 0.70 — —%
Administrative Associate I — 1.00 1.00 1.00 — —%
Administrative Associate II 2.15 2.15 2.15 2.15 — —%
Administrative Associate III 0.20 0.20 0.20 0.20 — —%
Airport Specialist II — — 2.50 2.50 — —%
FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
Attachment A, Exhibit 4
Item 28
Attachment A Exhibit 4 -
Table of Organization.pdf

Item 28: Staff Report
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TABLE OF ORGANIZATION
Assistant Director Public Works 1.30 1.30 1.30 1.30 — —% Assistant Manager WQCP 2.00 2.00 2.00 2.00 — —%
Associate Engineer 3.00 3.00 3.05 3.05 — —%
Chemist 2.00 2.00 3.00 3.00 — —%
Deputy Chief/Fire Marshal 0.07 — — — — —%
Electrician 3.00 3.00 3.00 3.00 — —%
Electrician-Lead 2.00 2.00 2.00 2.00 — —%
Engineer 0.90 0.90 1.90 1.90 — —%
Engineering Technician III 0.25 0.25 0.20 0.20 — —%
Environmental Specialist 2.00 2.33 2.33 2.33 — —%
Equipment Operator 0.54 0.54 0.54 0.54 — —%
Facilities Maintenance Lead 1.00 1.00 1.00 1.00 — —%
Facilities Technician 1.50 2.50 — — — —%
Fire Marshal — 0.07 0.07 — (0.07) (100.0)%
Hazardous Materials Inspector 0.04 0.04 0.04 — (0.04) (100.0)% Heavy Equipment Operator 0.90 0.90 0.90 0.90 — —%
Heavy Equipment Operator-Lead 1.15 1.15 1.15 1.15 — —%
Industrial Waste Inspector 3.00 3.00 3.00 3.00 — —%
Industrial Waste Investigator 1.15 1.15 1.15 1.15 — —%
Laboratory Technician WQC 3.00 3.00 3.00 3.00 — —%
Landfill Technician 1.00 1.00 2.00 2.00 — —%
Management Analyst 2.30 2.30 2.30 2.90 0.60 26.1%
Manager Airport 1.00 1.00 1.00 1.00 — —%
Manager Environmental Control Program 5.00 5.33 5.33 5.33 — —% Manager Laboratory Services 1.00 1.00 1.00 1.00 — —%
Manager Maintenance Operations 1.96 1.96 1.96 1.96 — —% Manager Solid Waste 1.00 1.00 1.00 1.00 — —%
FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
Attachment A, Exhibit 4
Item 28
Attachment A Exhibit 4 -
Table of Organization.pdf

Item 28: Staff Report
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TABLE OF ORGANIZATION
Manager Water Quality Control Plant 1.00 1.00 1.00 1.00 — —% Manager Watershed Protection 0.95 0.95 0.95 0.95 — —%
Plant Mechanic 7.00 7.00 7.00 7.00 — —%
Program Assistant I 1.00 1.00 1.00 1.00 — —%
Program Assistant II 2.00 2.00 2.00 2.00 — —%
Project Engineer 1.83 1.83 2.83 2.83 — —%
Project Manager 1.35 1.35 1.35 1.35 — —%
Senior Accountant 0.30 0.30 0.30 0.30 — —%
Senior Buyer 1.00 1.00 1.00 1.00 — —%
Senior Chemist 2.00 2.00 2.00 2.00 — —%
Senior Engineer 3.76 3.76 3.76 3.76 — —%
Senior Industrial Waste Investigator 1.00 1.00 1.00 1.00 — —% Senior Management Analyst 0.21 0.21 0.21 0.21 — —%
Senior Mechanic 1.00 1.00 1.00 1.00 — —%
Senior Operator WQC 6.00 6.00 6.00 6.00 — —%
Senior Technologist 1.00 1.00 1.00 1.00 — —%
Storekeeper 1.00 1.00 1.00 1.00 — —%
Street Maintenance Assistant 1.00 1.00 — — — —%
Street Sweeper Operator 1.63 1.63 1.63 1.63 — —%
Supervisor WQCP Operations 3.00 3.00 3.00 3.00 — —%
Surveyor, Public Works 0.12 0.12 0.12 0.12 — —%
Technologist 1.00 1.00 1.00 1.00 — —%
Traffic Controller Maintainer I 0.06 0.06 0.06 0.06 — —% WQC Plant Operator II 16.00 16.00 16.00 16.00 — —%
Zero Waste Coordinator 1.00 1.00 1.00 1.00 — —%
Total Public Works 101.32 103.98 106.98 107.47 0.49 0.5% FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
Attachment A, Exhibit 4
Item 28
Attachment A Exhibit 4 -
Table of Organization.pdf

Item 28: Staff Report
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TABLE OF ORGANIZATION
Utilities
Account Specialist 1.00 1.00 1.00 1.00 — —%
Accountant 1.30 1.30 1.30 1.30 — —%
Administrative Assistant 1.00 1.00 1.00 1.00 — —%
Administrative Associate II 6.00 6.00 6.00 6.00 — —%
Assistant City Attorney — 1.00 2.00 2.00 — —%
Assistant Director Administrative Services 0.25 0.25 0.25 0.25 — —% Assistant Director Sustainability and Climate
Action
— — 1.00 1.00 — —%
Assistant Director Utilities Customer Support
Services

1.00 1.00 2.00 2.00 — —%
Assistant Director Utilities Engineering 1.00 1.00 1.00 1.00 — —% Assistant Director Utilities Operations 1.00 1.00 1.00 1.00 — —% Assistant Director Utilities/Resource
Management

1.00 1.00 1.00 1.00 — —%
Associate Sustainability Program
Administrator***
— 1.00 1.00 2.00 1.00 100.0%
Business Analyst 6.00 6.00 6.00 6.00 — —%
Cathodic Protection Technician Assistant 1.00 1.00 1.00 1.00 — —% Cathodic Technician 1.00 1.00 1.00 1.00 — —%
Cement Finisher 2.00 2.00 2.00 3.00 1.00 50.0%
Contracts Administrator 0.70 0.70 0.70 0.70 — —%
Coordinator Utilities Projects 6.00 8.00 8.00 10.00 2.00 25.0% Customer Service Representative 7.00 7.00 7.00 7.00 — —% Customer Service Specialist 2.00 2.00 2.00 2.00 — —%
Customer Service Specialist-Lead 2.00 2.00 2.00 2.00 — —% Deputy Chief/Fire Marshal 0.08 — — — — —%
Deputy City Attorney 1.00 — 0.50 0.50 — —%
Director Administrative Services/CFO 0.20 0.20 0.20 0.20 — —% FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
Attachment A, Exhibit 4
Item 28
Attachment A Exhibit 4 -
Table of Organization.pdf

Item 28: Staff Report
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TABLE OF ORGANIZATION
Electric Heavy Equipment Operator 2.00 1.00 1.00 1.00 — —% Electric Project Engineer 4.00 8.00 8.00 10.00 2.00 25.0% Electric Underground Inspector 2.00 2.00 2.00 2.00 — —% Electric Underground Inspector-Lead 1.00 1.00 1.00 1.00 — —% Electrical Equipment Technician 1.00 1.00 1.00 1.00 — —% Electrician Assistant I 3.00 3.00 3.00 3.00 — —%
Electrician-Lead — — — 1.00 1.00 —%
Engineer 4.00 4.00 5.00 5.00 — —%
Engineering Manager - Electric 1.00 1.00 1.00 1.00 — —% Engineering Manager - WGW 1.00 1.00 1.00 1.00 — —%
Engineering Technician III 3.00 3.00 3.00 3.00 — —%
Environmental Specialist — 0.34 0.34 0.34 — —%
Equipment Operator — 1.00 1.00 1.00 — —%
Fire Marshal — 0.08 0.08 — (0.08) (100.0)%
Gas and Water Meter Measurement and
Control Technician

4.00 4.00 4.00 5.00 1.00 25.0%
Gas and Water Meter Measurement and
Control Technician - Lead

1.00 1.00 1.00 1.00 — —%
Hazardous Materials Inspector 0.06 0.06 0.06 — (0.06) (100.0)% Heavy Equipment Operator - Install/Repair 4.00 4.00 4.00 5.00 1.00 25.0% Human Resources Representative 1.00 1.00 1.00 1.00 — —% Industrial Waste Investigator 0.50 0.50 0.50 0.50 — —%
Inspector, WGW Utilities Field Svc 5.00 5.00 5.00 5.00 — —% Lineperson/Cable Specialist 10.00 10.00 10.00 10.00 — —% Lineperson/Cable Specialist-Lead 4.00 4.00 4.00 4.00 — —% Maintenance Mechanic-Welding 2.00 2.00 2.00 2.00 — —%
Management Analyst — 1.00 1.00 1.00 — —%
Manager Communications 1.00 1.00 1.00 1.00 — —%
FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
Attachment A, Exhibit 4
Item 28
Attachment A Exhibit 4 -
Table of Organization.pdf

Item 28: Staff Report
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TABLE OF ORGANIZATION
Manager Customer Service 1.00 1.00 1.00 1.00 — —%
Manager Electric Operations 1.00 1.00 1.00 1.00 — —%
Manager Environmental Control Program — 0.34 0.34 0.34 — —% Manager Information Technology — — 1.00 1.00 — —%
Manager Treasury, Debt & Investments 0.40 0.40 0.40 0.40 — —% Manager Utilities Compliance 1.00 1.00 1.00 1.00 — —%
Manager Utilities Credit & Collection 1.00 1.00 1.00 1.00 — —% Manager Utilities Operations WGW 1.00 1.00 1.00 1.00 — —% Manager Utilities Program Services 1.00 2.00 2.00 2.00 — —% Manager Utilities Strategic Business 1.00 1.00 1.00 1.00 — —% Manager Utilities Telecommunications 1.00 1.00 3.00 3.00 — —% Meter Reader 6.00 6.00 5.00 5.00 — —%
Meter Reader-Lead 1.00 1.00 1.00 1.00 — —%
Metering Technician 3.00 2.00 2.00 2.00 — —%
Metering Technician-Lead 1.00 1.00 1.00 1.00 — —%
Offset Equipment Operator 0.48 0.48 0.48 0.98 0.50 104.2% Overhead Underground Troubleman 2.00 2.00 2.00 2.00 — —% Power Engineer 1.00 — — — — —%
Principal Business Analyst 1.00 1.00 1.00 1.00 — —%
Principal Utilities Program Manager — 1.00 — — — —%
Program Assistant I 1.50 1.50 2.00 2.00 — —%
Program Assistant II 1.00 — — — — —%
Project Engineer 5.00 5.00 5.00 5.00 — —%
Project Manager 0.75 0.75 0.75 0.75 — —%
Resource Planner 5.00 5.00 5.00 5.00 — —%
Restoration Lead 1.00 1.00 1.00 1.00 — —%
SCADA Technologist 2.00 — — — — —%
FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
Attachment A, Exhibit 4
Item 28
Attachment A Exhibit 4 -
Table of Organization.pdf

Item 28: Staff Report
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TABLE OF ORGANIZATION
Senior Accountant 0.70 0.70 0.70 0.70 — —%
Senior Business Analyst 3.00 3.00 3.00 3.00 — —%
Senior Electrical Engineer 5.00 5.00 5.00 5.00 — —%
Senior Engineer 5.00 6.00 5.00 5.00 — —%
Senior Management Analyst 0.70 0.70 0.70 0.70 — —%
Senior Marketing Analyst — — 1.00 1.00 — —%
Senior Mechanic 1.00 1.00 1.00 1.00 — —%
Senior Resource Planner 6.50 7.00 7.00 7.00 — —%
Senior Utilities Field Service Representative 1.00 1.00 1.00 1.00 — —% Senior Utilities System Operator — — 1.00 1.00 — —%
Senior Water Systems Operator*** 2.00 2.00 2.00 2.00 — —% Storekeeper 1.00 1.00 1.00 1.00 — —%
Storekeeper-Lead 0.80 0.80 0.80 0.80 — —%
Street Light, Traffic Signal & Fiber Technician 5.00 4.00 4.00 4.00 — —% Street Light, Traffic Signal & Fiber-Lead 2.00 2.00 2.00 2.00 — —% Substation Electrician 6.00 6.00 6.00 6.00 — —%
Substation Electrician-Lead 2.00 2.00 2.00 2.00 — —%
Sustainability Programs Administrator 4.00 5.00 5.00 5.00 — —% Tree Maintenance Person 1.00 1.00 1.00 1.00 — —%
Utilities Chief Operating Officer 1.00 1.00 1.00 1.00 — —% Utilities Compliance Technician 3.00 3.00 3.00 3.00 — —% Utilities Compliance Technician-Lead 1.00 1.00 1.00 1.00 — —% Utilities Credit/Collection Specialist 2.00 2.00 2.00 2.00 — —% Utilities Director 1.00 1.00 1.00 1.00 — —%
Utilities Engineer Estimator 5.00 5.00 5.00 5.00 — —%
Utilities Field Services Representative 5.00 5.00 5.00 5.00 — —% Utilities Install Repair-Lead-Welding Certified 2.00 3.00 3.00 3.00 — —% FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
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Utilities Install Repair-Welding Certified 3.00 3.00 3.00 3.00 — —% Utilities Install/Repair*** 10.00 10.00 10.00 11 1 10.0% Utilities Install/Repair Assistant 1.00 1.00 1.00 1.00 — —% Utilities Install/Repair-Lead*** 5.00 4.00 4.00 4.00 — —% Utilities Key Account Representative 3.00 3.00 3.00 3.00 — —% Utilities Locator 3.00 3.00 3.00 3.00 — —%
Utilities Safety Officer 1.00 1.00 1.00 1.00 — —%
Utilities Supervisor 12.00 12.00 12.00 12.00 — —%
Utilities System Analyst — 2.00 2.00 2.00 — —%
Utilities System Operator 5.00 6.00 5.00 5.00 — —%
Utility Engineering Estimator - Lead 1.00 1.00 1.00 1.00 — —% Warehouse Supervisor 0.80 0.80 0.80 0.80 — —%
Water System Operator II*** 4.00 4.00 4.00 4.00 — —%
WGW Heavy Equipment Operator 4.70 4.70 4.70 4.70 — —%
Total Utilities 257.42 267.60 273.60 283.96 10.36 3.8%
Total Enterprise Fund 358.74 371.58 380.58 391.43 10.85 2.9% Other Funds
Capital Project Fund
Administrative Assistant 0.65 0.65 0.65 0.65 — —%
Administrative Associate III 0.80 0.80 0.80 0.80 — —%
Assistant Director Public Works 0.72 0.72 0.72 0.72 — —% Associate Engineer 1.65 1.65 1.65 1.65 — —%
Associate Planner 0.35 0.35 0.35 0.35 — —%
Building Serviceperson 1.00 1.00 — — — —%
Building Serviceperson-Lead 1.40 1.40 — — — —%
Cement Finisher-Lead 0.74 0.74 0.74 0.74 — —%
Chief Transportation Official 0.30 0.30 0.30 0.30 — —%
FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
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Contracts Administrator 0.60 0.60 0.60 0.60 — —%
Coordinator Public Works Projects 1.30 1.30 1.30 1.30 — —% Coordinator Transportation Systems
Management

1.35 1.35 1.35 — (1.35) (100.0)%
Engineer 2.10 3.10 3.10 3.10 — —%
Engineering Technician III 0.50 0.50 0.50 0.50 — —%
Facilities Technician 1.50 1.50 1.50 1.50 — —%
Inspector, Field Services 1.21 1.21 1.21 1.21 — —%
Landscape Architect Park Planner 0.90 0.90 0.90 0.90 — —% Management Analyst 0.95 0.95 0.80 0.90 0.10 12.5%
Manager Facilities 0.10 0.10 0.10 0.10 — —%
Manager Maintenance Operations 0.65 0.65 0.65 0.65 — —% Parking Operations-Lead 0.30 0.30 0.30 0.30 — —%
Planner — — — 0.60 0.60 —%
Project Engineer 7.92 7.92 7.92 7.92 — —%
Project Manager 0.80 0.80 1.45 1.45 — —%
Senior Engineer 4.04 4.64 4.64 4.64 — —%
Senior Management Analyst 0.60 0.60 0.75 0.75 — —%
Senior Planner 0.80 0.80 1.55 2.30 0.75 48.4%
Supervisor Inspection and Surveying 0.65 0.65 0.65 0.65 — —% Surveyor, Public Works 0.55 0.55 0.55 0.55 — —%
Traffic Engineering-Lead 0.60 — — — — —%
Transportation Planning Manager 0.45 0.45 0.45 0.45 — —% Total Capital Project Fund 35.48 36.48 35.48 35.58 0.10 0.3% General Liabilities Insurance Program Fund
Senior Management Analyst — — 1.00 1.00 — —%
Total General Liabilities Insurance Program
Fund
— — 1.00 1.00 — —%
FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
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Printing and Mailing Services
Manager Revenue Collections 0.10 0.10 0.10 0.10 — —%
Offset Equipment Operator 1.52 1.52 1.52 2.02 0.50 32.9% Total Printing and Mailing Services 1.62 1.62 1.62 2.12 0.50 30.9% Special Revenue Funds
Account Specialist 1.37 1.37 1.37 1.37 — —%
Account Specialist-Lead 0.55 0.55 0.55 0.55 — —%
Administrative Assistant 0.25 0.25 0.25 0.25 — —%
Administrative Associate II 0.20 0.20 0.20 0.20 — —%
Community Service Officer 0.37 0.37 0.37 0.31 (0.06) (16.2)% Coordinator Public Works Projects 0.20 0.20 0.20 0.20 — —% Electrician 0.20 0.20 0.20 0.20 — —%
Facilities Maintenance-Lead 0.15 0.15 0.15 0.15 — —%
Facilities Painter 0.25 0.25 0.25 0.25 — —%
Facilities Technician 0.45 0.45 0.45 0.45 — —%
Management Analyst 0.35 0.35 — — — —%
Manager Community Services Senior Program 1.00 1.00 1.00 1.00 — —% Manager Maintenance Operations 0.19 0.19 0.19 0.19 — —% Manager Revenue Collections 0.28 0.28 0.28 0.28 — —%
Parking Operations-Lead 0.65 0.65 0.65 0.65 — —%
Senior Management Analyst — — 0.35 0.35 — —%
Senior Planner 0.40 0.40 0.40 0.30 (0.10) (25.0)%
Street Maintenance Assistant 2.00 2.00 2.00 2.00 — —%
Street Sweeper Operator 0.37 0.37 0.37 0.37 — —%
Transportation Planning Manager 0.50 0.50 0.50 0.50 — —% Total Special Revenue Funds 9.73 9.73 9.73 9.57 (0.16) (1.6)% FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
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Technology Fund
Administrative Assistant 1.00 1.00 1.00 1.00 — —%
Assistant Director Administrative Services 0.10 0.10 0.10 0.10 — —% Assistant Director Information Technology — — — 1.00 1.00 —% Business Analyst 1.00 1.00 1.00 1.00 — —%
Desktop Technician 6.00 6.00 6.00 4.00 (2.00) (33.3)%
Director Information Technology/CIO 1.00 1.00 1.00 1.00 — —% Management Analyst — — 1.00 1.00 — —%
Manager Information Technology 3.00 3.00 3.00 3.00 — —% Senior Business Analyst 2.00 2.00 2.00 2.00 — —%
Senior Management Analyst 1.00 1.00 1.00 1.00 — —%
Senior Technologist 14.00 16.00 17.00 17.00 — —%
Technologist — — — 2.00 2.00 —%
Total Technology Fund 29.10 31.10 33.10 34.10 1.00 3.0% Vehicle Replacement and Maintenance Fund
Assistant Director Public Works 0.25 0.25 0.25 0.25 — —% Assistant Fleet Manager 1.00 1.00 1.00 1.00 — —%
Equipment Maintenance Service Person 1.00 1.00 2.00 2.00 — —% Fleet Services Coordinator 1.00 1.00 2.00 2.00 — —%
Management Analyst 0.20 0.20 0.20 0.40 0.20 100.0%
Management Assistant 1.00 1.00 1.00 1.00 — —%
Manager Fleet 1.00 1.00 1.00 1.00 — —%
Motor Equipment Mechanic II 5.00 5.00 5.00 5.00 — —%
Motor Equipment Mechanic-Lead 2.00 2.00 1.00 1.00 — —%
FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
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*The FY 20
24 Adopted Budget does not include City Council actions to amend staffing levels approved in the FY 2024 Mid-Year Budget Review (CMR 2311-2233). These positions appear as a base adjustment in the FY 2025 Proposed Budget. **The FY 2025 Budget includes new job classifications that require completion of appropriate review and potential discussions with bargaining groups. Proposals in this budget include estimated funding levels for financial planning purposes only and do not reflect the final terms of the proposed classifications. ***Positions approved by Finance Committee and/or City Council subsequent to the presentation of the FY 2025 Proposed Budget.

Project Manager 1.00 1.00 1.00 1.00 — —%
Senior Management Analyst 0.08 0.08 0.08 0.08 — —%
Total Vehicle Replacement and
Maintenance Fund

13.53 13.53 14.53 14.73 0.20 1.4%
Workers' Compensation Program Fund
Senior Human Resources Administrator 1.00 1.00 1.00 1.00 — —% Total Workers’ Compensation Program
Fund

1.00 1.00 1.00 1.00 — —%
Total Other Funds 90.46 93.46 96.46 98.10 1.64 1.7%
Total Citywide Positions 956.00 1,017.85 1,063.10 1,092.10 29.00 2.7% FY 2022
Actuals
FY 2023
Actuals
FY 2024
Adopted
Budget
FY 2025
Adopted
Budget
FY 2025
Change
FTE
FY 2025
Change %
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Finance Committee
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Administrative Services
Meeting Date: May 8, 2024
Report #:2402-2587
TITLE
FY 2025 Proposed Municipal Fee Schedule

RECOMMENDATION
Staff recommends that the Finance Committee review amendments to the Municipal Fee Schedule for FY 2025 and make recommendations to Council for incorporation into the FY 2025 budget.

EXECUTIVE SUMMARY
This report represents the annual update to over 960 fees as part of the budget process. It highlights proposed changes to the FY 2025 Municipal Fee Schedule. These changes encompass 18 new fees across the Community Services, Planning and Development Services, and Police Departments, the deletion of 26 fees within the Community Services and Police Departments, and adjustments to 281 existing fees. It is based on the general premise of exception reporting, which is reflected in the practice of applying a General Rate Increase (GRI) to fees to keep up with the cost of service, new service delivery, and changes in cost recovery levels, and reporting out any fees that are proposed to stay the same or change by an amount other than the GRI of 5.2% for FY 2025. Recommended approval will be incorporated in the FY 2025 budget process and ultimately result in the fees for FY 2025 services.

BACKGROUND
The City charges fees for a variety of services provided, such as fees for photocopies, building inspection services, and room rentals. As part of the annual budget process, staff submit changes to the Municipal Fee Schedule for review, followed by final approval during City Council’s budget adoption.

In FY 2013, staff completed a cost of services study for most departments. Results from that study set the standards used by departments to review and calculate the City’s expenditures linked to a particular fee activity to determine the fee amount and cost recovery level. These Attachment A, Exhibit 5
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expenditures represent the budgeted cost of staff time including salaries and benefits, related non-salary expenditures, department and citywide cost allocations to recuperate costs for department management oversight and internal support functions (e.g. purchasing, payroll, and human resources). As part of the FY 2025 Proposed Budget, staff is recommending appropriation of funding on a one-time basis ($50,000) for a consultant to conduct a study of the cost allocation plan and municipal fee schedule. A comprehensive review and analysis to ensure the City’s fees are collected appropriately and the City’s processes remain aligned with current best practices.

Since it was last updated by Council in FY 2019, the User Fee Cost Recovery Level Policy has served as a guide for departments to update fees by ensuring proper alignment with user cost recovery levels. This Policy will also be assessed as part of the consultant study.

Table 1: Summary of Municipal Fee Cost Recovery Policy
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This annual report brings forward amendments to the Municipal Fee Schedule organized into three categories
(1) New fees,
(2) Deletion of existing fees, and
(3) Changed fees to attain a cost recovery level consistent with other fees or based on a market study for similar services.

ANALYSIS
The development of the Municipal Fee Schedule for FY 2025 reflects some department service realignments as most fees across the City have been updated to maintain cost recovery levels.

The average increase of salaries and benefits from FY 2024 to FY 2025 was 5.2% and is the general rate of increase (GRI) that is applied to most fees to maintain current cost recovery levels, as directed by the policy. Fees that were updated by a factor greater or less than 5.2% to realize a higher cost recovery level, or were adjusted based on a fee study, market study, or staff recommendation are further detailed in Attachment A.

New Fees
As identified in Table 1 below, eighteen (18) new fees are recommended to be added to the FY 2025 Municipal Fee Schedule: Community Services Department (12 fees), Planning and Services Department (two fees), and Police Department (four fees).

Community Services Department recommended additions:
• 11 fees for veterinary services for cats and dogs
• These fees are being added for enhanced clarity and to provide a more detailed breakdown of services.
• One fee for camping equipment rentals
• This fee is for electric warming plates and serve as an alternative to open flames for keeping food at temperature during rentals, reducing the burden of fire permits and environmental impacts.

Planning and Development Services recommended additions:
• One fee for the Rental Registry Program
• This fee will apply to residential rentals with five or more units. Per Council’s direction (CMR #2308-19041), this fee will be waived in FY 2025 and begin in FY 2026. • One fee for shelter permits
• This fee will apply for elgible non-profits applying for a temporary use permit to establish a temporary shelter for the unhoused.
1 City Council November 27, 2023 Agenda Item #16:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=13307 Attachment A, Exhibit 5
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Police Department recommended additions:
• Four concealed carry weapon fees
• This implements concealed carry weapon fees in response to a recent Supreme Court decision, requiring the City to take on the permitting process previously handled by the County Sheriff.

Table 2. New Fees for FY 2025
Department Fee Title FY 2025 Proposed Fee Cost
Recovery
Level
Community
Services
Animal: 4lbs - 20lbs (Cremation) Communal: $50.00 per pet Private: $200.00 per pet
High
Community
Services
Community Cat Package (Spay & Neuter) $55.00 per pet High Community
Services
Cat Package (Vaccination) $85.00 per pet High
Community
Services
Dog Package (Vaccination) $85.00 per pet High
Community
Services
Kitten Package (Vaccination) $125.00 per pet High
Community
Services
Puppy Package (Vaccination) $125.00 per pet High
Community
Services
Cryptorchid Abdominal - Fee $100.00 per pet High
Community
Services
Medication - Injectable $15.00 - $250.00 each High
Community
Services
Medication - Oral $15.00 - $250.00 each High
Community
Services
Medication - Topical $15.00 - $250.00 each High
Community
Services
Nail Trim $0.00 with surgery High
Community
Services
Electric Warming Plates Resident Fee: $10.00-$100.00
Non-Resident Fee: $11.00-
$115.00
High
Planning and
Development
Rental Registry Fee Fees waived in FY25 High
Planning and
Development
Temporary Use Permit - Minor, Temporary
Shelter Provider
Fees waived per program
guidelines
High
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Department Fee Title FY 2025 Proposed Fee Cost
Recovery
Level
Police
Department
Concealed Carry Weapon
a. New (Application fee)
$130.00 per application High
Police
Department
Concealed Carry Weapon
b. New (Issuance fee)
$522.00 per application High
Police
Department
Concealed Carry Weapon
c. Renewal fee
$99.00 per application High
Police
Department
Concealed Carry Weapon
d. Modification/Duplicate fee
$15.00 per application High
Deleted Fees
17 fees in the Community Services Department and nine fees in the Police Department are recommended to be deleted in the FY 2025 Municipal Fee Schedule. Each fee, and the justification for its deletion, is detailed in table 3 below.

Table 3. Deletion of Fees for FY 2025
Department Fee Title Justification
Community
Services
48-Hour Cancellation Fee (non-refundable) Additional fee no longer charged Community
Services
Antibiotic Injection Consolidated into new fee
“Medication - Injectable”
Community
Services
Canine Training Deposit Vendor recommended
Community
Services
Common Procedures - Flushing Drains Consolidated into broader services such as wound care and minor
surgery
Community
Services
Common Procedures - Oral or Topical Treatment Split into two new fees “Medication - Oral” and “Medication - Topical”
Community
Services
Feral/Rescue Own FeLV/FIV Test Vendor recommended
Community
Services
Feral/Rescue Own Vaccine Vendor recommended
Community
Services
Heartworm Testing Consolidated into “Labwork -
Heartworm Test”
Community
Services
Injectable Medication Name change to “Medication -
Injectable” for consistency with other
services
Community
Services
Labwork - PCV Consolidated into “Labwork -
PCV/TP”
Community
Services
Oral Prescription Medication Name change to “Medication - Oral” for consistency with other services
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Department Fee Title Justification
Community
Services
Pregnancy Fee plus Spay Fee Vendor recommended
Community
Services
Rat, Guinea Pig - Neuter Vendor recommended
Community
Services
Rat, Guinea Pig - Spay Vendor recommended
Community
Services
Special Medications Vendor recommended
Community
Services
Trap Rental (14 day maximum) Transition from a flat and daily fee structure to only a flat fee.

Community
Services
Permit Fees (Art Center) Permit will no longer be offered Police Pushcart Vendor - Additional Cart Compliance with 2018 CA State Senate Bill 946
Police Pushcart Vendor - New Compliance with 2018 CA State Senate Bill 946
Police Pushcart Vendor - Location and/or Cart Change Compliance with 2018 CA State Senate Bill 946
Police Pushcart Vendor - Renewal Compliance with 2018 CA State Senate Bill 946
Police Pushcart Vendor Employee - New Compliance with 2018 CA State Senate Bill 946
Police Pushcart Vendor Employee - Renewal Compliance with 2018 CA State Senate Bill 946
Police Solicitation for Commercial Purpose Compliance with 2018 CA State Senate Bill 946
Police Solicitor Employee (Under Master License) Compliance with 2018 CA State Senate Bill 946
Police Solicitor/Peddler Master License Compliance with 2018 CA State Senate Bill 946
Changed Fees
281 fees are recommended to be adjusted by a factor other than the 5.2% GRI to adjust for the general change in salary and benefits adjustments between FY 2024 and FY 2025. Changes to these fees as detailed in Attachment A generally reflect changes to:
(1) Attain a cost recovery level consistent with other fees; (2) Align with a market study;
(3) Modify the fee structure to align with current service delivery; or (4) Hold the fee flat to avoid discouraging use of the service of activity Each fee is listed by name along with the Adopted FY 2024 rate, the Proposed FY 2025 rate, the percentage change, and the fee change justification in Attachment A.

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Parking In-Lieu fees
Palo Alto Municipal Code (PAMC) Chapter 16.57.030 requires that the Parking In-Lieu Fee be recalculated in the event the City Council approved the construction of a public parking structure.

Per the Municipal Code, the fee shall be adjusted at the time the construction contract is awarded to include actual costs to date, plus the projected construction cost, and authorized contingency.

A second recalculation must occur after the project is completed, based on actual design and construction costs incurred. The recalculated fee may be higher or lower than the initial fee.

In December 2018, Council awarded a construction contract to Swinerton Builders (CMR 9688) for the California Avenue Area Parking Garage. The total project cost was calculated per PAMC

16.57.030 and includes design costs plus additional services, the construction bid with authorized contingency, and all other staff and administrative costs incurred. This calculation was done and approved as part of the Fiscal Year 2020 budget development process (CMR 10225). The cost per parking space was calculated at $106,171 for the Fiscal Year 2020 Adopted Municipal Fee Schedule.

The California Avenue Parking Garage was completed and opened in December 2020. Staff has completed all project close-out documents and recalculated the Parking In-Lieu Fee at $105,811.

After adding the appropriate construction cost indexes for the San Francisco Bay Area for Fiscal Year 2021 through Fiscal Year 2024, the revised fee was set at $130,823. Adding the respective construction cost index for FY 2025 brings the fee to $135,514.

Development Impact and In-Lieu Fees
In the Planning and Development Services Department, impact fees (i.e., community center, park, library, and citywide transportation impact fees) and in-lieu fees were increased by 3.6% percent to reflect the most recently published Construction Cost Index (CCI) for the San Francisco Bay Area, as calculated by the Engineering News Record. This is in accordance with Municipal Code 16.64.110, as amended on November 28, 2016 (CMR 7518), to standardize when these fees are paid, bring uniformity to the calculation in effect, bring uniformity to the annual adjustment rate, and other updates. Since these fees are governed by the applicable Municipal Code section, they are not discussed in Attachment A.

FISCAL/RESOURCE IMPACT
This action aligns fees with expense increases associated with these services. It works to ensure the City can maintain cost recovery levels, and is part of the FY 2025 Proposed Operating Budget

POLICY IMPLICATIONS
These recommendations are consistent with existing City policies. Where a fee or charge is subject to Proposition 26, the amount of the new or increased fee or charge is no more than necessary to cover the reasonable cost of the City service, and the manner in which those costs Attachment A, Exhibit 5
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are allocated to a payer bears a fair and reasonable relationship to the payer’s burden on, or benefits received from, the City service funded by the fee. Certain types of fees, such as fines, penalties and/or late charges, or charges imposed for entrance to or use of, as well as the purchase, rental, or lease of local government property, are generally not limited to the actual costs of providing service. Instead, these types of fees are more typically governed by local market rates, reasonableness, and potentially other policy factors. These types of fees may have rates that are higher than the full cost recovery level.

STAKEHOLDER ENGAGEMENT
Staff has coordinated internally with budget and management staff in each department citywide to develop the recommendations in this report. Conversations with the City Council throughout May and June prior to the adoption of the FY 2025 Operating and Capital Budgets and Municipal Fee Schedule allow for public participation in this annual process.

ENVIRONMENTAL REVIEW
Adjustment to the Municipal Fee Schedule is a governmental fiscal activity that does not involve any commitment to any specific project, and therefore does not constitute a “project” pursuant to CEQA regulation 15378(b)(4).

ATTACHMENTS
Attachment A: Municipal Fee Schedule Amendments for FY 2025 Changed Fees APPROVED BY:

Lauren Lai, Chief Financial Officer/Director Administrative Services Attachment A, Exhibit 5
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Mu nicipal Fee Schedule Amendments for FY 2025 Changed Fees ATTACHMENT A Administrative Services
Fee Title FY 2024 Adopted FY 2025 Proposed % Change Justification Budget Book $46.00 each $52.00 each 13.0% Fees aligned to attain proper cost recovery level Mailing (Certified) $4.15 each $4.40 each 13.0% Fee set by outside agency Returned Payment Charge (CA Civil Code Section 1719) $25.00 each $25.00 each 0.0% Fee set by outside agency Tobacco Retail Permit One-time application fee $347. Annual permit fee $434. One-time application fee $347. Annual permit fee $434. 0.0% Fee set by outside agency Business Registry Fee $50.00 per business $50.00 per business 0.0% Fee set by Council policy City Clerk
Fee Title FY 2024 Adopted FY 2025 Proposed % Change Justification Domestic Partners Registration Fee $38.00 each $38.00 each 0.0% Keep fees flat due to low volume Candidate Filing Fee $25.00 each $25.00 each 0.0% To avoid discouraging use Certification Fee $11.00 each $11.00 each 0.0% To avoid discouraging use Fair Political Practices Commission Photocopies $0.10 per page $0.10 per page 0.0% Fee set by outside agency Community Services
Fee Title FY 2024 Adopted FY 2025 Proposed % Change Justification A. Animals (0lbs - 3lbs) Private: $162; Communal: $116 per pet Private: $150; Communal: $50 per pet -7.0% Change title from “A. Animal: 0lbs - 24lbs” A. Neuter (0lbs - 50lbs) $100.00 per pet $200.00 per pet 100.0% Fee set by vendor A. Oak Grove Picnic 1 – 50 People $103.00 per group $110.00 per group 6.8% Fees aligned with market rates A. Performance Day Package $1,773 each $1,773 each 0.0% Fees aligned with market rates A. Small Bucket $3.50 - $7.00 per bucket $5.00 - $8.00 per bucket 7.5% Fees aligned with market rates A. Vehicle Entry - Daily Fee - Vehicle Capacity 9 passengers or less
$6.00 each $6.00 each 0.0% Fee set by Council
Additional hours past ten daily $268.00 per hour $268.00 per hour 0.0% Fees aligned with market rates Additional Performance $430.00 each $430.00 each 0.0% Fees aligned with market rates Additional Performance Hours Past Four per Performance $145.00 per hour $145.00 per hour 0.0% Fees aligned with market rates Attempted Spay Surgery in Previously Spayed Animal $40.00 per pet $20.00 per pet -50.0% Fee set by vendor B. Medium Bucket $7.00 - $13.00 per bucket $10.00 - $15.00 per bucket 43.0% Fees aligned with market rates B. Neuter (51lbs and 99lbs) $150.00 per pet $225.00 per pet 50.0% Change title from “Neuter (51lbs and over) B. Oak Grove Picnic 51 - 100 People $206.00 per group $215.00 per group 4.4% Fees aligned with market rates B. Production Day Package $1,505.00 each $1,505.00 each 0.0% Fees aligned with market rates B. Vehicle Entry - Daily Fee - Vehicle Capacity 10-24
passengers
$30.00 each $30.00 each 0.0% Fee set by Council
Bandages $28.00 - $110.00 per pet $30.00 - $110.00 per pet 7.0% Fee set by vendor Bordatella & Parainfluenza $15.00 per pet $15.00 per pet 0.0% Change title from “Bordatella” Brachycephalic Fee $75.00 per pet $75.00 per pet 0.0% Fee set by vendor C. Animal: 21lbs - 49lbs Private: $185.00; Communal: $134.00 per pet Private: $225.00; Communal: $50.00 22.0% Fee set by vendor C. Large Bucket $9.00 - $16.00 per bucket $13.00 - $18.00 per bucket 43.0% Fees aligned with market rates C. Neuter (100 lbs and over) $200.00 per pet $250.00 per pet 25.0% Fee set by vendor C. Oak Grove Picnic 101 - 150 People $309.00 per group $325.00 per group 5.2% Fees aligned with market rates Attachment A, Exhibit 5
Item 28
Attachment A Exhibit 5 - Fiscal Year
2025 Municipal Fee Changes.pdf

Item 28: Staff Report
Pg.
68 Packet Pg. 634 of 946

Mu nicipal Fee Schedule Amendments for FY 2025 Changed Fees ATTACHMENT A C. Rehearsal Day Package 1,075.00 each 1,075.00 each 0.0% Fees aligned with market rates C. Vehicle Entry - Daily Fee - Vehicle Capacity 25 or more passengers with a group permit
$60.00 each $60.00 each 0.0% Fee set by Council
Cats (5+ Years) $50.00 per cat $50.00 per cat 0.0% Fee set by vendor Cats (6 months - 5 years) $125.00 per cat $130.00 per cat 4.0% Fee set by vendor Cats (Two adopted at once) $175.00 per cat $185.00 per cat 6.0% Fee set by vendor Cats (Under 6 Months) Resident: $150.00 per cat; Non-Resident: $175.00 per cat Resident: $175.00 per cat; Non-Resident: $205.00 per cat 17.0% Fee set by vendor Classes, camps, corporate events $21.00 - $1,075.00 per event $21.00 - $1,075.00 per event 0.0% Fee set by vendor Clinic Board Fee $21.00 per pet $100.00 per pet 376.0% Fee set by vendor Common Procedures - Fluorescein Eye Stain $18.00 each $19.00 each 6.0% Fee set by vendor Common Procedures - Medical Grooming $87.00 per hour $93.00 per hour 7.0% Fee set by vendor Cryptorchid Subcutaneous - Fee $53.00 - $107.00 per pet $50 per pet -5.6% Change title from “Cryptorchid Fee” D. Animal: 50lbs - 79lbs Private: $204.00 per pet; Communal: $150.00 per pet Private: $250.00 per pet; Communal: $50.00 per pet -23.0% Change title from “C. Animal: 50lbs – 75lbs" D. Dark Day Package $290.00 each $290.00 each 0.0% Fees aligned with market rates D. Jumbo Bucket $11.00 - $19.00 per bucket $16.00 - $22.00 per bucket 43.0% Fees aligned with market rates D. Spay (0lbs - 50lbs) $125.00 per pet $250.00 per pet 100.0% Fee set by vendor D. Vehicle Entry - Annual Pass $0.00 - $86.00 each $0.00 - $86.00 each 0.0% Fee set by Council DA2PP $15.00 per pet $15.00 per pet 0.0% Fee set by vendor Deciduous Tooth Extraction $27.00 each $30.00 each 11.0% Fee set by vendor Dewclaw Removal $40.00 - $58.00 per dewclaw $75.00 per dewclaw 87.0% Fee set by vendor Dogs (5+ Years) $75.00 per dog $75.00 per dog 0.0% Fee set by vendor Dogs (6 months - 5 years) Resident: $150.00 per dog; Non-Resident: $175.00 per dog Resident: $175.00 per dog; Non-Resident: $205.00 per dog 17.0% Fee set by vendor Dogs (Under 6 Months) Resident: $150.00 per dog; Non-Resident: $250.00 per dog Resident: $300.00 per dog; Non-Resident: $350.00 per dog 100.0% Fee set by vendor Dressing Room - M3 $32.00 per hour $32.00 per hour 0.0% Fees aligned with market rates E. Animal: 80lbs - 99lbs Private: $220.00 per pet; Non-Communal: $174.00 per pet Private: $275.00 per pet; Non-Communal: $50.00 per pet 25.0% Change title from “D. Animal: 76lbs – 99lbs" E. Spay (51lbs and 99lbs) $175.00 per pet $300.00 per pet 71.0% Fee set by vendor Ear Cleaning $35.00 per pet $30.00 per each -14.0% Fee set by vendor Ear Mite Treatment (2 doses of Revolution) $32.00 per pet $60.00 per pet 88.0% Change title from “Ear Mite Treatment” Exotic Animals $10.00 per pet $10.00 per pet 0.0% Fee set by vendor F. Animal: 100lbs - 150lbs Private: $254.00 per pet; Non-Communal: $191.00 per pet Private: $300.00 per pet; Non-Communal: $50.00 per pet 18.0% Change title from “E. Animal: 100lbs – 150lbs" F. Cremation Services - Custom Engraved Plaque Fee $22.00 each $22.00 each 0.0% Fee set by vendor F. Spay (100 lbs and over) $225.00 per pet $350.00 per pet 56.0% Fee set by vendor Flea +/- Preventative (per dose) $28.00 per dose $30.00 - $100.00 per dose 7.0% Fee set by vendor Fluid Therapy - IV Fluids $26.00 per hour $27.00 per hour 4.0% Fee set by vendor Fluid Therapy - SQ (Cats) $41.00 each $44.00 each 7.0% Fee set by vendor Fluid Therapy - SQ (Dogs) $53.00 each $56.00 each 6.0% Fee set by vendor FVRCP $15.00 per pet $15.00 per pet 0.0% Fee set by vendor Individual Youth Sport Registration Resident: $197.00 - $395.00 per person; Non-Resident: Fee plus up to 50%
Resident: $197.00 - $395.00 per person; Non-Resident: Fee plus up to 50%

0.0% To avoid discouraging use
IV Catheter Placement $62.00 each $66.00 each 6.0% Fee set by vendor Attachment A, Exhibit 5
Item 28
Attachment A Exhibit 5 - Fiscal Year
2025 Municipal Fee Changes.pdf

Item 28: Staff Report
Pg.
69 Packet Pg. 635 of 946

Mu nicipal Fee Schedule Amendments for FY 2025 Changed Fees ATTACHMENT A Kitten Package (over 3 months) $100.00 per pet $100.00 per pet 0.0% Change title from “Kitten Package” Lab work - Fecal O & P $29.00 each $31.00 each 7.0% Change title from “Labwork – Fecal" Lab work - FeLV/FIV Test $35.00 each $37.00 each 6.0% Fee set by vendor Lab work - In-House Fungal Culture $37.00 each $39.00 each 5.0% Change title from “Labwork - Fungal Culture” Labwork - Heartworm Test $41.00 each $44.00 each 7.0% Fee set by vendor Labwork - Parvo Test $44.00 each $47.00 each 7.0% Fee set by vendor Labwork - PCV/TP $29.00 each $30.00 each 3.0% Change title from “Labwork - PCV” and “Labwork - TP” Labwork - Pre-surgical $150.00 per pet $150.00 per pet 0.0% Fee set by vendor Labwork - Reference Lab Labwork cost plus $28.00 service fee Labwork cost plus $28.00 service fee 0.0% Fee set by vendor Labwork - Skin Scraping $24.00 each $30.00 each 25.0% Fee set by vendor Labwork - Urine Dipstick $17.00 each $30.00 each 76.0% Fee set by vendor Labwork - USG $17.00 each $30.00 each 76.0% Fee set by vendor Large Animal (Horses, Cows, Pigs, etc.) Actual cost including transportation expense will be charged to house the animal at the appropriate facility
Actual cost including transportation expense will be charged to house the animal at the appropriate facility

0.0% Fee set by vendor
Late Fee for Spay/Neuter Pickup $25.00 per pet $50.00 per pet 100.0% Fee set by vendor Local Anesthetic $37.00 each $39.00 each 5.0% Fee set by vendor Long-Acting Topical Ear Medication $64.00 per pet $64.00 per dose 0.0% Fee set by vendor Microchip $25.00 per pet $25.00 per pet 0.0% Fee set by vendor Nail Trim $10.00 per pet $30.00 per pet 200.0% Change title from “Nail Clip” Neuter $70.00 per pet $75.00 per pet 7.0% Fee set by vendor No-Show Fee (non-refundable) $50.00 per pet $50.00 per pet 0.0% Fee set by vendor Organic Garden Clean-up/Security Deposit $100.00 - $200.00 per garden plot $100.00 - $200.00 per garden plot 0.0% Keep security deposit fee flat Organic Garden Plot $0.90 per square foot $0.90 per square foot 0.0% Fees aligned with market rates Peers Park, Mitchell Park Field House Resident: $187.00 per day; Non-Resident: $252.00 per day Resident: $209.00 per day; Non-Resident: $282.00 per day 12.0% Fees aligned with market rates Picnic Reservations - Arbor Group Site $56.00 per group $62.00 per group 12.0% Fees aligned with market rates Picnic Reservations - East Meadow Group Site $87.00 per group $97.00 per group 12.0% Fees aligned with market rates Picnic Reservations - Pine Grove Group Site $159.00 per group $178.00 per group 12.0% Fees aligned with market rates Picnic Reservations - Redwood Group Site $128.00 per group $143.00 per group 12.0% Fees aligned with market rates Picnic Reservations - Sequoia Group Site $71.00 per group $79.00 per group 12.0% Fees aligned with market rates Picnic Reservations (1 - 15 people) Resident: $32.00 per group; Non-Resident: $37.00 per group Resident: $35.00 per group; Non-Resident: $41.00 per group 12.0% Fees aligned with market rates Puppy Package (over 3 months) $100.00 each $100.00 each 0.0% Fees set by vendor Rabbit - Neuter Resident: $80.00 per pet; Non-Resident: $102.00 per pet Resident: $125.00 per pet; Non-Resident: $125.00 per pet 56.0% Fees set by vendor Rabbit - Spay Resident: $107.00 per pet; Non-Resident: $129.00 per pet Resident: $175.00 per pet; Non-Resident: $175.00 per pet 64.0% Fees set by vendor Rabbit Hemorrhagic Disease Vaccine $150.00 to $250.00 each $30.00 each -80.0% Fees set by vendor Rabbits $40.00 per pet $20.00 per pet -50.0% Fees set by vendor Rabies $15.00 per pet $15.00 per pet 0.0% Fees set by vendor Rabies (Actual Clinic Cost) $6.00 per pet $6.00 per pet 0.0% Fees set by vendor Rats, Hamsters, Guinea Pigs, & Mice $10.00 per pet $10.00 per pet 0.0% Fees set by vendor Rehearsal Hall Resident: $58.00 per hour; Non-Resident: $87.00 per hour Resident: $58.00 per hour; Non-Resident: $87.00 per hour 0.0% Fees aligned with market rates Attachment A, Exhibit 5
Item 28
Attachment A Exhibit 5 - Fiscal Year
2025 Municipal Fee Changes.pdf

Item 28: Staff Report
Pg.
70 Packet Pg. 636 of 946

Mu nicipal Fee Schedule Amendments for FY 2025 Changed Fees ATTACHMENT A Rescue Group (Non-Profit) - Cat Neuter $50.00 per pet $55.00 per pet 10.0% Fee set by vendor Rescue Group (Non-Profit) - Cat Spay $65.00 per pet $65.00 per pet 0.0% Fee set by vendor Rescue Group (Non-Profit) - Dog Neuter (over 50 lbs) $107.00 per pet $175.00 per pet 64.0% Fee set by vendor Rescue Group (Non-Profit) - Dog Neuter (under 50 lbs) $80.00 per pet $150.00 per pet 88.0% Fee set by vendor Rescue Group (Non-Profit) - Dog Spay (over 50 lbs) $125.00 per pet $300.00 per pet 140.0% Fee set by vendor Rescue Group (Non-Profit) - Dog Spay (under 50 lbs) $100.00 per pet $250.00 per pet 150.0% Fee set by vendor Routine Deworming (roundworms & hookworms) $31.00 each $31.00 each 0.0% Fee set by vendor Routine Deworming (roundworms & hookworms) $21.00 $30.00 42.9% Fee set by vendor Sedation/Anesthesia - Gas $93.00 for first 30 minutes; $1.70 per minute thereafter $100.00 for first 30 minutes; $1.80 per minute thereafter 7.5% Fee set by vendor Sedation/Anesthesia - IM $58.00 each $62.00 each 6.9% Fee set by vendor Sedation/Anesthesia - IV $82.00 each $88.00 each 7.3% Fee set by vendor Spay $85.00 per pet $90.00 per pet 5.9% Fee set by vendor Specialized Feeding $5.00 each $30.00 each 500.0% Fee set by vendor Surgery - Major Surgery, Preparation and Recovery $116.00 per hour $500.00 - $1,500.00 per hour 331.0% Fee set by vendor Surgery - Minor Surgery, Preparation and Recovery $44.00 each $50.00 - $500.00 each 13.6% Fee set by vendor Tapeworm Treatment (Praziquantel) $18.00 per pet $18.00 per pet 0.0% Fee set by vendor Teen Center Membership - Monthly $5.00 - $10.00 per month $5.00 - $10.00 per month 0.0% Fees aligned with market rates Teen Center Membership - School Year $70.00 each $70.00 each 0.0% Fees aligned with market rates Towle Camp (8 People) $30.00 per day $40.00 per day 33.3% Fees aligned with market rates Towle Camp Group (16 People) $50.00 per day $55.00 per day 10.0% Fees aligned with market rates Trap Rental - Deposit $100.00 each $75.00 each -25.0% Fee set by vendor Umbilical Hernia Repair $40.00 - $87.00 per pet $40.00 - $87.00 per pet 0.0% Fee set by vendor Veterinarian Exam $172.00 per hour $80.00 per hour -53.5% Fee set by vendor Visual and Performing Arts Activities $6.00 - $2,659.00 per hour $6.00 - $2,659.00 per hour 0.0% Fees aligned with market rates Wound Care $18.00 - $62.00 per pet $30.00 - $110.00 per pet 66.7% Fee set by vendor Fire
Fee Title FY 2024 Adopted FY 2025 Proposed % Change Justification 911 Advanced Life Support Transport Mileage $35.00 per mile $35.00 per mile 0.0% Align fees to flat mileage amount 911 Basic Life Support Transport Mileage $35.00 per mile $35.00 per mile 0.0% Alarm Registration Fee - New $56.00 per incident $56.00 per incident 0.0% Keep fees flat due to recent rollout
Alarm Registration Fee - Renewal $42.00 per incident $42.00 per incident 0.0% Alarm Registration Late Fee $20.00 per incident $20.00 per incident 0.0% Alarm Reinstatement Fee $50.00 per incident $50.00 per incident 0.0% Returned Check Fee $25.00 per incident $25.00 per incident 0.0% Fee set by outside agency Engine Company Second Reinspection $279.00 per hour $279.00 per hour 0.0% Keep fee flat due to cost recovery level FireMed Monthly Subscription – Business, Tier 1 - 5 $20.00 - $1,000.00 per business $20.00 - $1,000.00 per business 0.0% Align fees with FireMed program FireMed Monthly Subscription – Residential $8.00 per household $8.00 per household 0.0% Interfacility Basic Life Support Transport Mileage $35.00 per mile $35.00 per mile 0.0% Align fee to flat mileage amount Night Transport Fee $105.00 per occurrence $105.00 per occurrence 0.0% Align fees with ambulance transport program Oxygen $179.00 per occurrence $179.00 per occurrence 0.0% Paramedic Internship Fee $1,000.00 each $1,000.00 each 0.0% To avoid discouraging use Returned Check Fee $25.00 per incident $25.00 per incident 0.0% Flat penalty type fee aligned with the alarm program Library
Attachment A, Exhibit 5
Item 28
Attachment A Exhibit 5 - Fiscal Year
2025 Municipal Fee Changes.pdf

Item 28: Staff Report
Pg.
71 Packet Pg. 637 of 946

Mu nicipal Fee Schedule Amendments for FY 2025 Changed Fees ATTACHMENT A Fee Title FY 2024 Adopted FY 2025 Proposed % Change Justification Billing Fee for Overdue Items $5.00 per item $5.00 per item 0.0% Fees set by outside agency Collection Agency Processing Fee $10.00 per item $12.00 per item 20.0% Damaged and Lost Materials - LINK+ $115.00 per item $115.00 per item 0.0% Expired Hold Fee $1.00 per item $1.00 per item 0.0%
To avoid discouraging use
Laser Prints - Black & White $0.15 per page $0.15 per page 0.0% Laser Prints - Color $0.50 per page $0.50 per page 0.0% Mitchell Park Library Community Room
Resident Fee: $66.00 per hour
Non-Resident Fee: $99.00 per hour
Resident Fee: $66.00 per hour
Non-Resident Fee: $99.00 per hour

0.0%
Mitchell Park Library Community Room - Full Day Rental
Resident Fee: $330.00 per day
Non-Resident Fee: $494.00 per day
Resident Fee: $330.00 per day
Non-Resident Fee: $494.00 per day

0.0%
Overdue Materials - In House Laptops $0.30 per hour $0.30 per hour 0.0% Photography/Filming - Space Rental Fee $100.00 - $2,000.00 per session $100.00 - $2,000.00 per session 0.0% Replacement Library Card $1.00 each $1.00 each 0.0%
Rinconada Library Community Room
Resident Fee: $96.00 per hour
Non-Resident Fee: $143.00 per hour
Resident Fee: $96.00 per hour
Non-Resident Fee: $143.00 per hour

0.0%
Rinconada Library Community Room - Full Day Rental
Resident Fee: $478.00 per day
Non-Resident Fee: $716.00 per day
Resident Fee: $478.00 per day
Non-Resident Fee: $716.00 per day

0.0%
Room Cleaning & Damage Deposit $306.00 - $3,060.00 per deposit $306.00 - $3,060.00 per deposit 0.0% Room Cleaning Fee - Add on $80.00 - $500.00 per event $80.00 - $500.00 per event 0.0% Office of Transportation
Fee Title FY 2024 Adopted FY 2025 Proposed % Change Justification All Downtown and SOFA Garages and Lots - One Day
Parking Permit
$25.00 per day $0.00 - $25.00 per day 0.0% Provide flexibility in adjustment of pricing based on market conditions.

All Downtown and SOFA Lots and Garages Annual Parking
Permit
$900.00 per year $900.00 per year 0.0% FY 2025 pricing based on CMR #11795 All Downtown and SOFA Lots and Garages Reduced-Price
Annual Parking Permit
$225.00 per year $225.00 per year 0.0% FY 2025 pricing based on CMR #11795 All Downtown and SOFA - Wait List Registration $11.00 per occurrence
$11.00 per occurrence $11.00 per occurrence 0.00 FY 2025 pricing based on CMR #11795 Bicycle Training (or other training TBD) $17.00 - $80.00 per class $17.00 - $80.00 per class 0.0% FY 2025 pricing based on CMR #11795 California Avenue Area All Garages and Lots - Daily Parking Permit
$25.00 per day $0 - $25 per day 0.0% Provide flexibility in adjustment of pricing based on market conditions.

California Avenue Area All Garages and Lots Annual Parking Permit
$650.00 per year $650.00 per year 0.0% FY 2025 pricing based on CMR #11795 California Avenue Area All Garages and Lots Reduced-Price Annual Parking Permit
$162.50 per year $162.50 per year 0.0% FY 2025 pricing based on CMR #11795 College Terrace RPP - Annual Resident Parking Permit $50.00 per year $50.00 per year 0.0% FY 2025 pricing based on CMR #11795 College Terrace RPP Daily Resident Parking Permit $5.00 per day $5.00 per day 0.0% FY 2025 pricing based on CMR #11795 Crescent Park NOP - Annual Resident Parking Permit $50.00 per year $50.00 per year 0.0% FY 2025 pricing based on CMR #11795 Crescent Park NOP Daily Resident Parking Permit $5.00 per day $5.00 per day 0.0% FY 2025 pricing based on CMR #11795 Downtown RPP - Annual Resident Parking Permit $50.00 per year $50.00 per year 0.0% FY 2025 pricing based on CMR #11795 Downtown RPP - Daily Resident Parking Permit $5.00 per day $5.00 per day 0.0% FY 2025 pricing based on CMR #11795 Downtown RPP - Reduced-Price Employee Parking Permit $131.25 each $131.25 each 0.0% FY 2025 pricing based on CMR #11795 Downtown RPP Full Price Employee Parking Permit $525.00 each $525.00 each 0.0% FY 2025 pricing based on CMR #11795 Evergreen Park - Mayfield RPP Annual Resident Parking
Permit
$50.00 per year $50.00 per year 0.0% FY 2025 pricing based on CMR #11795 Evergreen Park - Mayfield RPP Daily Resident Parking
Permit
$5.00 per day $5.00 per day 0.0% FY 2025 pricing based on CMR #11795 Evergreen Park - Mayfield RPP Full Price Employee Parking Permit
$375.00 each $375.00 each 0.0% FY 2025 pricing based on CMR #11795 Evergreen Park - Mayfield RPP Reduced-Price Employee
Parking Permit
$93.75 each $93.75 each 0.0% FY 2025 pricing based on CMR #11795 Old Palo Alto RPP - Annual Resident Parking Permit $50.00 per year $50.00 per year 0.0% FY 2025 pricing based on CMR #11795 Old Palo Alto RPP - Daily Resident Parking Permit $5.00 per day $5.00 per day 0.0% FY 2025 pricing based on CMR #11795 Parkland Dedication Fee - Land Single Family: 531 sq. ft. per unit Multi-Family: 366 sq. ft. per unit
Single Family: 531 sq. ft. per unit
Multi-Family: 366 sq. ft. per unit

0.0% FY 2025 pricing based on CMR #11795
Southgate RPP - Annual Resident Parking Permit $50.00 per year $50.00 per year 0.0% FY 2025 pricing based on CMR #11795 Attachment A, Exhibit 5
Item 28
Attachment A Exhibit 5 - Fiscal Year
2025 Municipal Fee Changes.pdf

Item 28: Staff Report
Pg.
72 Packet Pg. 638 of 946

Mun icipal Fee Schedule Amendments for FY 2025 Changed Fees ATTACHMENT A Southgate RPP - Daily Resident Parking Permit $5.00 per day $5.00 per day 0.0% FY 2025 pricing based on CMR #11795 Southgate RPP - Full Price Employee Parking Permit $375.00 each $375.00 each 0.0% FY 2025 pricing based on CMR #11795 Southgate RPP - Reduced Price Employee Parking Permit $93.75 each $93.75 each 0.0% FY 2025 pricing based on CMR #11795 Standard On-street Disabled Parking Space $1,010.00 each $1,010.00 each 0.0% FY 2025 pricing based on CMR #11795 Discounted Fare $1.00 per passenger trip $1.00 per passenger trip 0.0% To encourage further adoption and use of service
Monthly Pass $65.00 per month $65.00 per month 0.0%
On-Demand Transit (Palo Alto Link) $0.00 - $3.50 per passenger trip $0.00 - $3.50 per passenger trip 0.0% One-Way Fare $3.50 per passenger trip $3.50 per passenger trip 0.0% Weekly Pass $20.00 per week $20.00 per week 0.0%
Planning and Development Services
Fee Title FY 2024 Adopted FY 2025 Proposed % Change Justification A. $1.00 - $25,000.00 Permit Valuation $1.00 per unit $1.00 per unit 0.0% Fees set by outside agency
B. $25,001.00 - $50,000.00 Permit Valuation $2.00 per unit $2.00 per unit 0.0% C. $50,001.00 - $75,000.00 Permit Valuation $3.00 per unit $3.00 per unit 0.0% D. $75,001.00 - $100,000.00 Permit Valuation $4.00 per unit $4.00 per unit 0.0% E. Each $25,000.00 Increment or Fraction Thereof Above
$100,000.00
$1.00 per unit $1.00 per unit 0.0%
F. Minimum $1.00 per unit $1.00 per unit 0.0%
SB 1186 Mandated Fee $4.00 each $4.00 each 0.0%
SB 330 Fee $2,961.84 each $2,961.84 each 0.0%
Strong Motion Instrument Program – Commercial $28.00 per $100,000.00 permit valuation ($0.50 minimum) $28.00 per $100,000.00 permit valuation ($0.50 minimum) 0.0% Strong Motion Instrument Program – Residential $13.00 per $100,000.00 permit valuation ($0.50 minimum) $13.00 per $100,000.00 permit valuation ($0.50 minimum) 0.0% Police
Fee Title FY 2024 Adopted FY 2025 Proposed % Change Justification Department of Justice Fingerprint and Rolling Fee $52.00 each $57.00 each 9.6% Fees set by outside agency OPM/DOD Background Check $5.00 per application $5.00 per application 0.0% Parenting Project Materials $44.00 each $44.00 each 0.0% Maintain cost recovery level Parenting Project Program $149.00 per family $149.00 per family 0.0% Quarantine Home Inspection Fee (Animal Control) $46.00 each $46.00 each 0.0% Keep fees flat due to recent transition Report Copy Fee $15.00 each $15.00 each 0.0%
Fees set by outside agency
Secondhand Dealer - DOJ $300.00 per application $316.00 per application 5.3% Impoundment Fees – First Offense $35.00 per occurrence $35.00 per occurrence 0.0% Impoundment Fees – Second Offense $50.00 per occurrence $50.00 per occurrence 0.0% Impoundment Fees – Third and Subsequent Offenses $100.00 per occurrence $100.00 per occurrence 0.0% Subpoena Fee $24.00 per hour $24.00 per hour 0.0%
Temporary Street Closure $124.00 - $1,474.00 plus cost to provide certain services $124.00 - $1,474.00 plus cost to provide certain services 0.0% Maintain cost recovery level Vehicle Repossession Receipt $15.00 each $15.00 each 0.0% Fees set by outside agency Public Works
Fee Title FY 2024 Adopted FY 2025 Proposed % Change Justification A. Pavement Condition: Poor $13.00 per square foot $14.00 per square foot 7.7% Adjustment of labor and materials costs
B. Pavement Condition: Fair/At-Risk $16.00 per square foot $17.00 per square foot 6.3% C. Pavement Condition: Good $19.00 per square foot $20.00 per square foot 5.3% D. Pavement Condition: Very Good - Excellent $27.00 per square foot $28.00 per square foot 3.7% Electric Vehicle Charger Connection $0.00 to $2.00 per connection $0.00 to $2.00 per connection 0.0% Electric Vehicle Charger Connection Overstay $0.00 to $5.00 per hour $0.00 to $5.00 per hour 0.0% Service Lateral Connection $1,681.00 each $1,756.00 each 4.5% Attachment A, Exhibit 5
Item 28
Attachment A Exhibit 5 - Fiscal Year
2025 Municipal Fee Changes.pdf

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ATTACHMENT A, EXHIBIT 6

Fiscal Year 2025
Impact and In-Lieu Municipal Fees

City Council approves the following Impact and In-Lieu Municipal Fees as part of its adoption of the Fiscal Year 2025 Budget. Fees subject to the California Mitigation Fee Act will be valid 60 days after adoption.

Impact/In-Lieu Fee Unit of Measure FY 2025 Amount
Charleston / Arastradero Impact Fee Per residential unit $1,744.00 Charleston / Arastradero Impact Fee Per commercial sq. ft. $0.51 Citywide Transportation Impact Fee Per net new PM peak hour trip $10,103.99 Community Center Impact Fee
Per net new 1,000 sq. ft.
(commercial/industrial) $1,533.00
Community Center Impact Fee Per net new 1,000 sq. ft. (hotel/motel) $262.00 Community Center Impact Fee Per single family unit $5,228.71 Community Center Impact Fee Per multi-family unit $3,867.92 General Government Facilities Fee
Per 1,000 sq. ft. or fraction thereof
(commercial) $973.00
General Government Facilities Fee
Per 1,000 sq. ft. or fraction thereof
(office/institutional) $1,301.00
General Government Facilities Fee
Per 1,000 sq. ft. or fraction thereof
(industrial) $324.00
General Government Facilities Fee Per unit (single family) $1,744.59 General Government Facilities Fee Per unit (multi-family) $1,394.64 Housing Impact Fee Per non-residential office/R&D sq. ft. $80.00 Housing Impact Fee
Per non-residential hotel, retail, other sq.
ft. $27.00
Housing Impact Fee Per sq. ft. residential apartments (rentals) $26.00 Library Impact Fee
Per net new 1,000 sq. ft.
(commercial/industrial) $914.00
Library Impact Fee Per net new 1,000 sq. ft. (hotel/motel) $156.00 Library Impact Fee Per single family unit $3,116.25
Library Impact Fee Per multi-family unit $2,304.49
Parking In-Lieu for Downtown
Assessment District Per parking space $135,514.06
Parkland Dedication Fee - In-Lieu Fee Single Family (per unit) $81,863.14 Parkland Dedication Fee - In-Lieu Fee Multi-Family (per unit) $56,425.44 Parkland Dedication Fee - Land Single Family (per unit) 531 sq. ft.

Parkland Dedication Fee - Land Multi-Family (per unit) 366 sq. ft.

Park Impact Fee
Per net new 1,000 sq. ft.
(commercial/industrial) $19,837.00
Item 28
Attachment A Exhibit 6 -
Impact and In-Lieu
Municipal Fees.pdf

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Park Impact Fee Per net new 1,000 sq. ft. (hotel/motel) $3,377.00 Park Impact Fee Per single family unit $67,650.36
Park Impact Fee Per multi-family unit $50,034.40
Public Art Fee Applies to new commercial buildings
including new construction, remodels,
additions, and reconstruction that have a
floor area of 10,000 sq. ft. or more and a
construction value of $200,000.00 or more,
and new residential projects of five units or
more, with some exclusions.
1% of first $132.67
million construction
valuation and 0.9%
of construction
valuation for
valuation in excess of
$132.67 million
Public Safety Facilities Fee
Per 1,000 sq. ft. or fraction thereof
(commercial) $773.00
Public Safety Facilities Fee
Per 1,000 sq. ft. or fraction thereof
(office/institutional) $1,103.00
Public Safety Facilities Fee
Per 1,000 sq. ft. or fraction thereof
(industrial) $258.00
Public Safety Facilities Fee Per unit (single family) $1,384.31 Public Safety Facilities Fee Per unit (multi-family) $1,107.96

Item 28
Attachment A Exhibit 6 -
Impact and In-Lieu
Municipal Fees.pdf

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ATTACHMENT B

1 RESOLUTION NO. XXXX

Resolution of the Council of the City of Palo Alto Establishing the City’s Appropriations Limit for Fiscal Year 2025

WHEREAS, under Article XIIIB of the Constitution of the State of California, the City of Palo Alto (City) may not appropriate any proceeds of taxes in excess of its appropriations limit; and

WHEREAS, since fiscal year 1991, the City is permitted to adjust its appropriations limit annually based on inflation and population adjustment factors; and

WHEREAS, pursuant to Government Code Section 37200, the calculation of the appropriations limit and the total appropriations subject to the limit were set forth in the annual budget of the City for Fiscal Year 202 5, which was adopted by ordinance of the Council on June 17, 2024; and

WHEREAS, pursuant to Government Code sections 7901 and 7910, the final calculation of the appropriations limit has been determined, and the adjustment factors on which the calculation is based are a 3.62 % percent change in California per capita income and a 0. 02% percent change in the population growth for the County of Santa Clara; and

WHEREAS, the documentation used in the determination of the appropriations limit has been made available to the general public for fifteen (15) days prior to the date of adoption of this resolution; and

WHEREAS, according to the final calculation, the City’s net appropriations subject to limitation are approximately $173.10 million.

NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows:

SECTION 1. The Council of the City of Palo Alto hereby finds that, for Fiscal Year 2025, the final calculation of the appropriations limit of the City of Palo Alto has been determined in accordance with the adjustment factors referred to above, the documentation used in the determination of the calculation has been made available to the general public for the period of fifteen days as required by law, and the City’s appropriations are under the appropriations limit by approximately $46.64 million.

SECTION 2. The Council hereby adopts the final calculation of the appropriations limit of the City for Fiscal Year 2025, a copy of which is attached hereto as Exhibit 1.

Item 28
Attachment B - FY 2025
City Appropriations Limit
Resolution.pdf

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ATTACHMENT B

2 SECTION 3. The Council finds that the adoption of this resolution does not constitute a project under the Section 15378(b)(4) of California Environmental Quality Act Guidelines because establishing the annual appropriations limit is a fiscal activity, and, therefore, no environmental assessment is necessary.

INTRODUCED AND PASSED: Enter Date Here

AYES:

NOES:

ABSENT:

ABSTENTIONS:

NOT PARTICIPATING:

ATTEST: APPROVED:

_________________________ ___________________________ City Clerk Mayor

APPROVED AS TO FORM:

City Attorney

City Manager

Director of Administrative Services

Item 28
Attachment B - FY 2025
City Appropriations Limit
Resolution.pdf

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Attachment B, Exhibit 1
FY 2025 Adopted Budget 306.63$ 135.13$ 23.08$ 12.00$ 476.84$ Less:

Interfund Transfers (38.84)$ (7.42)$ (17.04)$ -$ (63.31)$ Allocated Charges (26.95)$ (0.34)$ (0.53)$ -$ (27.82)$ Non-Proceeds (63.74)$ (129.40)$ (7.32)$ (12.14)$ (212.60)$ Net Appropriations Subject to Limit 177.10$ (2.04)$ (1.81)$ (0.14)$ 173.10$ FY 2024 Per Capita Income Change (CA Department of Finance) 3.62% Factor A 1.0362
FY 2024 Population Change (County of Santa Clara) 0.02% Factor B 1.0002
212.02$

1.0364
$219.74
Net Appropriations Subject to Limit 173.10$
Amount Under the Limit $46.64
2024* 1.0444 0.9975 1.0418 212.02$ 157.94$ 54.08$ 2023* 1.0755 1.0007 1.0763 203.52$ 138.39$ 65.13$ 2022* 1.0573 0.9944 1.0514 189.10$ 127.09$ 62.01$ 2021 1.0373 1.0037 1.0411 179.86$ 113.06$ 66.80$ 2020 1.0385 1.0033 1.0419 172.75$ 127.42$ 45.33$ 2019 1.0367 1.0099 1.0470 165.80$ 114.94$ 50.86$ 2018 1.0369 1.0082 1.0454 158.36$ 131.49$ 26.87$ 2017 1.0537 1.0130 1.0674 151.49$ 109.51$ 41.98$ 2016 1.0382 1.0113 1.0499 141.92$ 100.60$ 41.32$ 2015 0.9977 1.0150 1.0127 135.17$ 82.93$ 52.24$ 2014 1.0512 1.0157 1.0677 133.48$ 90.28$ 43.20$ * FY 2022-2024 Appropriation Limits restated to correct for Total Adjustment Factor calculation error in those fiscal years.

APPROPRIATIONS LIMITATION COMPLIANCE CALCULATION
FOR FISCAL YEAR 2025 ADOPTED BUDGET
($ IN MILLIONS)

Total Budgeted Appropriations General Fund Capital
Projects Funds
Special
Revenue Funds Debt Service Fund Combined
Funds
FY 2024 Adopted Appropriations Limit
Factor A x Factor B
FY 2025 Adopted Appropriations Limit
On November 6, 1979, California voters approved Proposition 4, an initiative that added Article XIIIB to the state Constitution. The provisions of this article place limits on the amount of revenue that can be appropriated by all entities of government. The Appropriations Limit is based on actual appropriations during the 1978-1979 fiscal year, as increased each year using specified population and inflationary growth factors.

The City of Palo Alto remains well within its appropriations limit in FY 2025. Future year limit trends can be made based on the average change in regional population and income growth. The appropriations subject to limitation includes proceeds of taxes from the General Fund, Capital Projects Fund, and Special Revenue Funds.

Fiscal Year Per Capita Income
Factor
Population
Change Factor
Total Adjustment
Factor
Appropriations
Limit
Appropriations
Subject to Limit
Amount Under
the Limit
Item 28
Attachment B Exhibit 1 -
Appropriations Limit
Calculation.pdf

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Attachment C: Summary of Stanford Related Programs and Services

Fund
Dept. or
Project Description
Operating Fire Fire Services Contract with Stanford University Stanford reimburses the City for providing Fire services to the University based on an agreement between the City and the University.

Operating Office of
Transp.

Palo Alto Link (PAL) On Demand Transit Services
Palo Alto Link services provide on-demand transit services, and Stanford provides funding for a portion of this service.

Operating Police Dispatch Communication Services Contract with Stanford University Stanford reimburses the City for providing dispatcher communication services to the University based on an agreement between the City and the University.

Capital PL-
16000
Quarry Road Improvements and Transit Center Access
Stanford is the lead on this project, and in order to continue with it, Palo Alto voters must undedicate a portion of El Camino Park (which is owned by Stanford and leased to the City) so that the land can be used for transit center access. A ballot measure proposing this action is expected in 2024.

Capital FD-24000 Fire Training Facility Replacement
This project will identify an appropriate site and construct a new fire training facility in Palo Alto. The current training facility is located on the Stanford University campus and is not owned by the City. A feasibility study will be conducted to determine the facility needs as well as an appropriate and available location for the new facility.

Capital FD-25000 Fire Equipment Replacement
This project will replace variety of equipment required for different types of emergency response and training, a portion of which is funded by Stanford and used to provide services to the University. The Fire Department completed a comprehensive assessment of all current primary equipment categories, as well as estimated costs and replacement schedules.

Item 28
Attachment C - FY 2025
Summary of Stanford
Investments.pdf

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CITY OF PALO ALTO
Finance Committee
Regular Meeting
Tuesday, June 04, 2024

Agenda Item

2. Accept June 30, 2023 Actuarial Valuation of Palo Alto's Retiree Healthcare and Other Post Employment Benefits and Recommend to the City Council to Approve Annual Actuarially Determined Contribution for Fiscal Year 2025 and 2026; CEQA Status – Not a Project Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

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Finance Committee
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Administrative Services
Meeting Date: June 4, 2024
Report #:2402-2673
TITLE
Accept June 30, 2023 Actuarial Valuation of Palo Alto's Retiree Healthcare and Other Post Employment Benefits and Recommend to the City Council to Approve Annual Actuarially Determined Contribution for Fiscal Year 2025 and 2026; CEQA Status – Not a Project

RECOMMENDATION
Staff recommends that the Finance Committee recommend the City Council:

1. Review and accept the June 30, 2023 actuarial valuation of Palo Alto's Retiree Healthcare Plan (Attachment B); and

2. Approve funding of the annual Actuarial Determined Contribution (ADC) for Fiscal Year 2025 and Fiscal Year 2026 using a two-year phase-in of the adjusted assumptions.

EXECUTIVE SUMMARY
In accordance with the Governmental Accounting Standards Board (GASB), the City Council is required to review and approve the actuarial valuation for retiree healthcare plan on a bi- annual basis for the upcoming two fiscal years and approve funding of the annual Actuarial Determined Contribution (ADC). This current study presents the fund's status as of June 30, 2023 and will be used to inform the FY 2025 and FY 2026 annual operating budgets. This report was finalized after the development of the FY 2025 Proposed Budget therefore, funding levels in the FY 2025 Proposed Budget reflect the out years of the prior completed study as of June 30, 2021 1.

The City’s retiree medical trust is held by the California Employers Retirement Benefit Trust (CERBT) Fund that is managed by CalPERS. The City continues to select CERBT’s Strategy 1 asset allocation, currently projected at a 6.25% discount rate. With the adoption of the 1 Finance Committee, June 7, 2022, Agenda item #3, CMR ID 14112:
https://portal.laserfiche.com/Portal/DocView.aspx?id=65179&repo=r-704298fc&searchid=5b3b872d-50f9-45a2- ab27-53454d1ae3cc

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

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Retiree Benefits Funding Policy 2 the City Council directed staff to calculate additional discretionary payments ("prefunding") equivalent to a 5.75% discount rate and transmit amounts above payments at a 6.25% discount rate to the CERBT Fund. Through FY 2024, a total of $11.9 million in additional contributions are expected to be made to the CERBT due to this policy.

The June 30, 2023, valuation includes several changes that have impacted the CERBT fund status, primarily due to healthcare and economic fluctuations resulting from the COVID-19 pandemic and continued proactive funding contributions:
• Investment Returns: 2021-22 investment loss of -13.5%, compared to the 27.5% investment gains in 2020-21 (6.25% target);
• Projected Payroll: Higher than projected salary growth; • Health Premiums: Higher than projected healthcare premiums; and • Pre-Funding Policy: Actuarially Determined Contribution “ADC” (full ADC payments and pre-funding)
Compared to the favorable assumptions in the June 30, 2021 actuary study, these changes are advised to be taken in consideration of an uncertain environment. While the 2022-23 portfolio earnings yielded 6.4% and is within range of the 6.25% target, it is not known whether the recent change in healthcare premiums will be ongoing or an anomaly due to the significant governmental support of healthcare costs over the past two years. Because it is unknown whether these changes are the beginning of a trend, or merely a temporary anomaly, this report models short term significant rises in healthcare costs in alignment with inflation.

The outyears of the June 30, 2021 valuation report were used to develop the OPEB assumptions in the FY 2025 Proposed Budget. Based on these assumptions and the attached actuary report, $5.2 million ($3.3 million General Fund) should be added to the FY 2025 Budget to maintain pre-funding levels in alignment with City Council policy. On May 21, the Finance Committee (“Committee”) recommended full funding of the ADC and a 2- year phase-in of prefunding levels in accordance with City Council policy as part of the FY 2025 Budget. This action reduces the funding need in FY 2025 to $2.6 million ($1.65 million General Fund). The below table provides a summary of the difference between the funding FY 2025 Proposed Budget in all funds between the June 30, 2021 and June 30, 2023 valuation reports. A more detailed discussion of these is included in this report. 2 City Council, February 6, 2023, Agenda Item #3, Staff Report# 2212-0513:
https://portal.laserfiche.com/Portal/DocView.aspx?id=61647&repo=r-704298fc&searchid=81eeeb05-1df1-4590- 8ed4-5085f971df6d
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

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Table 1: Funding for the FY 2025 OPEB Obligations*
FY25
Proposed
ADC (6/30/21
valuation)
FY25
Adjusted ADC
(6/30/23
valuation)
$ Change
Actuarially
Determined
Contribution
• Proactive contribution at
discount rate of 5.75%
• 15-year amortization period as
of June 30, 2021 (13 years
remaining)
$16.8M $21.9M $5.1M
*Approximately 65% of costs are allocated to the General Fund

BACKGROUND
The City of Palo Alto offers its employees and retirees a Retiree Healthcare benefit plan which is managed and administered by the California Public Employees' Retirement System (CalPERS), a State of California Retiree Healthcare Trust program. Bi-annually staff contracts with an actuary firm that provides an actuarial report detailing the latest status of the City of Palo Alto's Retiree Healthcare plans for employees and retirees. The actuarial report is used to calculate the annual ADC and pre-funding based on Council policy to the trust. In addition, updates on the rate of return, funding status, and changes to the trust based on various impacts are detailed in the report. Unlike the pension actuary reports, this actuary details impacts by Fund and Department, which inform the development of the annual budget.

There are four groups of benefits within the CalPERS Retiree Healthcare benefit plans.

Attachment A outlines the different benefits levels by Group. These benefit levels are negotiated and approved as part of the employee contracts. Employees and retirees have an open enrollment window in October each year in which they can make changes to their healthcare plans that take effect in January of the following year.

CALPERS Projected Contribution Levels
The actuary report has two components to the annual billing of the employer portion of retiree healthcare contributions that comprise the Actuarial Determined Contribution (ADC), (1) the Normal Cost (NC), and (2) the Unfunded Actuarial Accrued Liability (UAAL). • NC: This reflects a rate of contribution for the plan of retirement healthcare benefits provided to current employees based on the current set of assumptions.
• Employer Amortization of UAAL: This is an annual payment calculated to pay down an agency's unfunded accrued liability. Assuming every assumption in the actuarial valuation was accurate, an organization would eliminate its unfunded pension liability if it made these payments annually for 30 years. The City Council approved a closed period to amortize the entire net pension liability over a specific timeframe, and 22 years (before the adoption of a Retiree Benefit Funding Policy) of payments Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

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remain as of June 30, 2021. The total liability will vary from one year to the next because of assumption changes and actuarial experience that is different from anticipated, such as actual investment returns that do not meet expectations.

As established by the City Council, the City's CERBT Fund is invested in a Strategy 1 asset allocation at a 6.25% discount rate. With the adoption of the Retiree Benefits Funding Policy , directed staff to calculate additional discretionary payments ("prefunding") equivalent to a 5.75% discount rate and transmit amounts above payments at a

6.25% discount rate to the CERBT Fund. The City's CERBT Fund was established in May 2008 at a level of $33 million and it has grown to $173.0 million as of March 31, 2024.

ANALYSIS
Summary of Actuarial Report June 30, 2023
Staff contracted with Foster and Foster Actuary Consultants for this retiree healthcare actuarial report (Attachment B) to determine the City's retiree healthcare liability and the ADC for Fiscal Years 2025 and 2026. The actuarial analysis is based on current employees' accrued benefit, and retired employees as of June 30, 2023.

This updated valuation includes several changes that have impacted the CERBT fund status, primarily due to healthcare and economic fluctuations resulting from the COVID-19 pandemic, inflation levels, and active employee salary growth. Most notably, investment returns for 2020-21 reached an unprecedented level of 27.5% for the period and then performance dropped to -13.5% for 2021-22. This volatile level of return had a significant impact on the overall status of the fund and is not expected to continue in future periods.

Healthcare premiums are higher than anticipated due to significant current inflation levels and a return to pre-pandemic levels of utilization.

Discount Rate Assumptions
The City Council has taken steps to ensure long-term liability assumptions and costs for OPEB are being proactively addressed, including the adoption of a Retiree Benefit Funding Policy3 that invests at an estimated discount rate for OPEB of 6.25% and transmits additional contributions to prefund OPEB obligations at the equivalent of a 5.75% discount rate. Through FY 2024, a total of $11.9 million in additional contributions are expected.

Discussed above, the ADC is impacted when actual experience differs from assumptions. One of the more significant impacts to ADC occurs when actual investment returns do not meet expectations. Chart 1 below presents historical returns since 2008-09. 3 City Council, February 6, 2023, Agenda Item #3:
https://portal.laserfiche.com/Portal/DocView.aspx?id=61647&repo=r-704298fc&searchid=81eeeb05-1df1-4590- 8ed4-5085f971df6d
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

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Chart 1: Historical Returns of the OPEB Trust
(Market Value of Plan Assets (MVA) and Expected Return) Projected Unfunded Actuarial Accrued Liability
This actuarial valuation includes the plan's "Funded Status." As of June 30, 2023, the CERBT Trust is funded at 56%, down 1,100 basis points from 67% in the June 30, 2021 actuarial valuation.

As of June 30, 2023, the Unfunded Actuarial Accrued Liability (UAAL) was $120.5 million for all funds and $77.9 million for the General Fund. Beginning with the June 30, 2013 valuations, the City aligned its actuarial analysis to align with GASB's rules regarding the "implied subsidy". The calculation of implied subsidy requires an agency to recognize that it pays the same medical premiums for active employees as those that are retired. The implied subsidy identifies and accounts for the agency paying the same blended premium for both active employees and retirees, even though the medical cost for active employees is lower than retirees .

Palo Alto had 902 active employees and 1,031 retirees as of June 30, 2023. The calculation increases the UAAL by $15.1 million or 18.9%; without the implied subsidy the UAAL for all funds would be at $76.8 million.

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

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Table 2: Unfunded Actuarial Accrued Liability (UAAL) June 30,
2021
June 30,
2023
Projected
June 30,
2024
Citywide – UAAL $80,027 $120,511 $140,372
General Fund – UAAL $51,522 $77,914 $91,242
Citywide Funded Ratio 67% 56% 54%
Citywide UAAL % Chg. from prior valuation 50.6% 16.5%
Sensitivity Analysis: Discount Rate and Amortization Period CalPERS recognizes the varying assumptions that may impact a plan's unfunded actuarial accrued liability and therefore a retiree healthcare plan's funding status, especially the implications of the discount rate and amortization assumptions. Therefore, in addition to the actuarial assumptions used to develop this annual evaluation, the actuary includes a sensitivity analysis of the retiree healthcare plan. Table 4 below reflects the impact on UAAL resulting from a reduction in the discount rate. Table 5 reflects the impact on ADC if the UAAL is amortized over different timeframes. It should be noted that the Council has adopted a Pension Funding Policy 3 seeking to reach a 90% funded level by 2036, so with 13 remaining years as of this June 30, 2023 valuation, a shorter period than the sensitivity scenarios below. As illustrated by tables four and five, these alternative assumptions cause significant impacts. For example, changing from a discount rate of 6.25% to 5.75% causes UAAL to increase by almost 15%.

Table 3: Discount Rate Sensitivity

6.25% (Current CERBT
Strategy)

5.75% 5.25%
Citywide – UAAL $120,511 $137,059 $155,266
General Fund – UAAL $77,914 $89,088 $100,923
Funded Ratio 56% 53% 50%
Table 4: Amortization Sensitivity, 6.25% Discount Rate
20 Years (Current) 18 Years
Normal Cost $7,489 $7,489
UAAL Amortization* $8,933 $9,617
Total ACD $16,416 $17,105
ACD (% of payroll) 12.8% 13.4%
*Includes administrative expenses
Funding for the FY 2025 Including Actuarial Determined Contribution (ADC) This section outlines staff's recommended funding level for OPEB obligations beginning in FY 2025 for Finance Committee review and discussion. Staff recommend accepting the assumptions in this valuation report to inform the development of the FY 2025 and FY 2026 budgets, along with long range financial plans for the outyears. This is in alignment Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

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with the Retire Benefit Policy, including tenants such as continuing to use a reduced discount rate of 5.75% and an accelerated, closed amortization schedule of 15 years (as of the June 30, 2021 valuation). Staff recommends the Finance Committee continue with this funding approach that adjusts assumptions based on current data and the principles noted above. Included below is an optional two-year phase-in of the June 30, 2023 valuation results that the Finance Committee directed staff to consider, on May 21, 2024, in the development of the FY 2025 Budget for City Council adoption in June 2024. Staff have also outlined the actuarial "baseline" scenario for consideration that represents the minimal investment required but is incompliant with City policy. Funding levels may be adjusted annually based on City Council direction and policy adjustment, as long as the baseline ADC is met.

Unlike the CalPERS pension plan, additional City contributions do not go into a separate Section 115 trust; instead, they remain in the plan and are included as assets in the CERBT each subsequent year, impacting the calculation of the ADC. This treatment of prefunding contributions included in assets and effectively reduce the ADC each future year.

Full ADC and Prefunding of FY 2025 OPEB Obligations
Staff recommend adjusting funding from the typical baseline calculation to better align with City Council policy to continue to proactively fund long-term liabilities. Recommended revisions to baseline assumptions include:
• Exclude proactive contributions at a lower discount rate towards the ADC:

Consistent with the pension proactive funding, this would treat the proactive contributions assuming a lower discount rate of 5.75 as if in a separate "trust" or "saving account." ADC calculations will remain at consistent levels and these proactive contributions remain additive to baseline calculations of liability. • Continue to assume a shortened amortization period of 13 remaining years:

This amortization period aligns OPEB with the City's Pension Policy goals to reach a 90% funded status over 15 years as of the June 30, 2021 valuation (by FY 2036).

This results in an FY 2025 Adjusted ADC of $21.9 million citywide (approximately $13.9 million in the General Fund), a $5.1 million increase from the $16.8 million ADC from the June 30, 2021 valuation used to develop the FY 2025 Proposed Operating Budget .

Finance Committee Recommendation: Two-Year Phase-In
On May 21, 2024 the Finance Committee recommended a two-year phase-in of the financial impacts of the June 30, 2023 valuation. This recommendation mitigates the immediate impacts of this report’s expense escalation and supports financial flexibility for the provision of services citywide while continuing to proactively prefund long-term obligations in alignment with City Council policy.

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This results in an FY 2025 Adjusted ADC of $19.4 million citywide (approximately $12.2 million in the General Fund), a $2.6 million ($1.65 million in the General Fund ) increase from the $16.8 million ADC from the June 30, 2021 valuation used to develop the FY 2025 Proposed Operating Budget .

Prior Valuation Additional Normal Cost Contributions
In the prior valuation period the City Council approved factoring in funding for the addition of nearly 60 full-time staff since the June 30, 2021 valuation date. Based on the average salary reported in that valuation and the variable portion of ADC, or normal cost for current employees, the retiree healthcare cost of the additional staffing was approximately $400,000 citywide ($298,000 or 74% General Fund). This associated retiree health cost was included in the FY 2023 and FY 2024 Adopted budgets in alignment with the assumptions noted above. This funding was included to proactively address the expected deviation in actuarial assumptions though as noted, were insufficient to mitigate the full impact of the changes from the FY 2023 report. Staff recommends removing this additional retiree health cost as the position additions that prompted it are now included in the June 30, 2023 valuation. The $416,000 programmed in the FY 2025 Proposed Budget for additional normal cost contributions partially offset the cost increase from the new valuation to bring it down to $5.1 million for all funds.

FISCAL/RESOURCE IMPACT
The FY 2025 Proposed Budget includes an ADC of $16.9 million, an increase of $2.9 million from FY 2024 Adopted levels of $14.0 million. Funding of the full ADC and two-year prefunding phase in recommended by the Finance Committee on May 21, 2024 increases the ACD in FY 2025 to $19.4 million. This recommendation by the Finance Committee will be included as an amendment to the FY 2025 Proposed Budget for City Council consideration during the adoption of the budget on June 17, 2024. Staff will incorporate this direction on an ongoing basis beginning in FY 2026. Funding for future fiscal years is subject to City Council approval through the annual budget process.

STAKEHOLDER ENGAGEMENT
The transmittal of the OPEB actuarial valuation as of June 30, 2023 begins conversations regarding the fiscal outlook for the City's OPEB liabilities and the appropriate contribution for the FY 2025 Actuarial Determined Contribution and prefunding levels. Initial public discussion was held with the Finance Committee on May 21, 2024, prior to City Council review and adoption of the FY 2025 Budget, scheduled for June 17, 2024.

ENVIRONMENTAL REVIEW
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Committee action on this item is not a project as defined by CEQA because accepting and approving an annual actuarially determined contribution is a fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4).

ATTACHMENTS
Attachment A: 4 Benefit Groups in the CalPERS Retiree Healthcare Benefits Plan Attachment B: City of Palo Alto Retiree Healthcare Plan June 30, 2023 Actuarial Valuation Contributions for FY 2025 and FY 2026
APPROVED BY:

Lauren Lai, Director of Administrative Services
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Attachment A: 4 Benefit Groups in the CalPERS Retiree Healthcare benefit plans City of Palo Alto Retiree Healthcare Benefit Plans and Tiers Miscellaneous Safety: Fire Safety: Police
Group 1
Retired before January 1, 2007; eligibility starting at the age 50 and 5 years of service ; full premium up to family coverage
Retired before March 1,
2009 ; eligibility starting at
the age of 50 and 5 years of
service; full premium up to
family coverage
Group 2
Retired between January
1, 2007
and May 1, 2011;
eligibility starting at the
age 50 and 5 years of
service; same as Group
1, but premium limited to
2nd most expensive
medical plan
Retired between January
1, 2007
and December 1, 2011;
eligibility starting at the
age 50 and 5 years of
service; same as Group
1, but premium limited to
2nd most expensive
medical plan
Retired between March 1,
2009 and April 1, 2015
(POA), between January 1,
2007 and June 1, 2012
(PMA); eligibility starting at
the age 50 and 5 years of
service; same as Group 1,
but premium limited to 2nd
most expensive medical
plan
Group 3
(Retirees)
Retired after Group 2, did not elect into Group 4, benefit same as active employees
Group 3
(Actives)
Currently active, not in
Group 4. Flat Dollar Caps
equal to actives
N/A
(All active Group 3 IAFF &
FCA elected into Group 4)
N/A
(All active Group 3 POA & PMA
elected into Group 4)
Group 4 Vesting Schedule : 10 years gets 50%, 20 years gets 100%, formula amount Item 28
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CITY OF PALO ALTO

RETIREE HEALTHCARE PLAN
June 30, 2023 Actuarial Valuation
Contributions for 2024/25 & 2025/26

Drew Ballard, FSA, EA, MAAA
Cathy Wandro, ASA, MAAA
Joseph Herm
Foster & Foster, Inc.

May 21, 2024

CONTENTS
L:\PaloAltoCity\OPEB\2023_Val\Reports\F&F_PaloAltoCity_24-05-21_OPEB_6-30-23_Funding_Report.docx Topic Page
Benefit Summary 1
Implied Subsidy 7
Participant Statistics 9
Actuarial Assumptions Highlights 15
Actuarial Methods 21
Assets 23
Results 25
Results – Details 39
Sensitivity Analysis 49
Comparison to Other Agencies 54
Actuarial Certification 57
Exhibits 58
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May 21, 2024 1

BENEFIT SUMMARY
 Eligibility  Retire directly from the City under CalPERS (age 501 and 5 years of CalPERS service or disability)
 Medical
Provider
 CalPERS health plans (PEMHCA)
 CalPERS administrative fees paid by City
 Retiree Medical
Benefit for
Current
Retirees:

Hired < 1/1/04
(1/1/05 SEIU,
1/1/06 PAPOA)

&

Did Not Elect
into Group 4
 GROUP 1 Retirees: Retired < 1/1/07 (3/1/09 for PAPOA) • Benefit = Full premium up to family coverage

 GROUP 2 Retirees: Retired after GROUP 1 and before
5/1/11 (12/1/11 IAFF/FCA, 6/1/12 PMA, 4/1/15 POA)
• Benefit = Same as above but premium limited to 2nd most expensive Basic (non-Medicare) medical plan in PEMHCA
Region 1 (PERS Platinum in 2023 and 2024)

 GROUP 3 Retirees: Retired after GROUP 2
• Benefit = same amount as active employees, which may change from time to time and in the future as bargaining agreements change (see next section for cap amounts)

1 Age 52 for Miscellane ous New Hires under PEPRA

May 21, 2024 2

BENEFIT SUMMARY
 Retiree Medical
Benefit for
Current
Actives:

Hired < 1/1/04
(1/1/05 SEIU,
1/1/06 PAPOA)

&

Did Not Elect
into Group 4
 GROUP 3 Future Retirees: Currently active and did not elect into Group 4
• No active Group 3 POA, PMA, IAFF or FCA
• Only remaining Group 3 actives in MGMT, SEIU, UMPAPA
(57 active members)
• Benefit = up to full premium, but limited to flat dollar caps same as active contribution

SEIU
Mgmt/UMPAPA/
Other Groups
2023 2024 2023 & 2024
Single $ 906 $ 943 $ 871
2-Party 1,812 1,885 1,742
Family 2,350 2,444 2,260

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May 21, 2024 3

BENEFIT SUMMARY
 Retiree Medical
Benefit for
those:

Hired ≥ 1/1/04
(1/1/05 SEIU,
1/1/06 PAPOA)

&

Employees
Hired Before
These Dates
Electing into
Group 4
2  GROUP 4 Future Retirees: Government Code §22893 “Vesting Schedule” (based on all CalPERS Service)3:

Years of Service % Years of Service %
< 10 0% 13 65%
10 50% 14 70%
11 55% ↓ ↓
12 60% > 20 100%
 100% vesting for disability retirements
 Vesting applies to 100/90 formula amounts, which are the maximum amounts payable by the City (retirees pay any difference between these amounts and actual premiums):
2023
2024
Single $ 883 $ 983
2-Party 1,699 1,890
Family 2,124 2,366
 If have 20 years City service do not need to retire directly from City

2 All currently active POA/PMA, IAFF/FCA are Group 4. Some Mgmt/Conf and some SEIU remained in Group 3, and some elected into Group 4.
3 Minimum 5 years City Service.

May 21, 2024 4

BENEFIT SUMMARY
 Dental, Vision
& Medicare
Part B
 None
 Surviving
Spouse Benefit
 100% of retiree benefit continues to surviving spouse if retiree elects CalPERS pension survivor allowance
 Waived Re-
election
 Waived retirees/beneficiaries may re-elect coverage at a future date
 Summary of
Changes Since
the Prior
Valuation
 None
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May 21, 2024 5

BENEFIT SUMMARY
 Pay-As-You-
Go ($000s)
Fiscal
Year

Cash
Implied
Subsidy

Total
2022/23 $ 11,269 $ 3,025 $ 14,294
2021/22 10,880 2,619 13,499
2020/21 10,631 2,346 12,977
2019/20 10,344 2,384 12,728
2018/19 9,960 2,197 12,157
2017/18 9,660 2,444 12,104
2016/17 9,713 2,203 11,916
2015/16 9,681 1,960 11,641
2014/15 8,995 1,916 10,911
2013/14 7,317 - 7,317
2012/13 8,766 - 8,766
2011/12 8,165 - 8,165

May 21, 2024 6

BENEFIT SUMMARY
Monthly Benefit Cap Amounts

2023 2024
Group Single 2-Party Family Single 2-Party Family
Group 14 $1,210.71 $2,421.42 $3,147.85 $1,339.70 $2,679.40 $3,483.22 Group 2 1,200.12 2,400.24 3,120.31 1,314.27 2,628.54 3,417.10 Group 3 SEIU 906.00 1,912.00 2,350. 00 943.00 1,885.00 2,444.00 Group 3 Others5 871.00 1,742.00 2,260.00 871.00 1,742.00 2,260.00 Group 4 (100% vest) 883.00 1,699.00 2, 124.00 983.00 1,890.00 2,366.00 % Decrease from Group 1 (assumes Group 1 is in most expensive plan) Group 2 1% 1% 1% 2% 2% 2%
Group 3 SEIU 25% 25% 25% 30% 30% 30%
Group 3 Others 28% 28% 28% 35% 35% 35%
Group 4 27% 30% 33% 27% 29% 32%

4 No cap for Group 1. Amount shown is most expensive Non-Medicare Region 1 premium. 5 UMPAPA, Mgmt, IAFF, FCA, PMA, and PAPOA.

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May 21, 2024 7

IMPLIED SUBSIDY
 For PEMHCA, employer cost for allowing retirees to participate at active rates. • Kaiser 2024 Region 1 plan:

 The City included the implied subsidy beginning with the June 30, 2013 valuation. 25 30 35 40 45 50 55 60 64
Premium 1,021 1,021 1,021 1,021 1,021 1,021 1,021 1,021 1,021 Male Cost by Age 371 412 487 579 696 866 1,094 1,376 1,636 Female Cost by Age 612 780 857 876 927 1,044 1,196 1,386 1,579 $-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$Cost/Premium
Age
Kaiser 2024 - Single Coverage

May 21, 2024 8

IMPLIED SUBSIDY

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May 21, 2024 9

PARTICIPANT STATISTICS
Participant Statistics

6 Excludes all waived retirees, regardless of age, except as noted. 7 Includes 68 waived retirees over 65.
8 Excludes all waived retirees over 65; includes 38 waived under 65 retirees. 6/30/15 6/30/17 6/30/19 6/30/21 6/30/23
 A c t i v e s
• Count 955 967 930 874 902
• Average Age 45.3 45.6 44.8 45.0 44.6
• Average City Service 10.8 10.9 10.8 11.2 10.4
• Average PERS Service 11.9 11.9 11.7 12.1 11.4
• Average Salary $91,714 $90,739 $110,969 $120,207 $134,338 • Total Salary (000’s) $87,586 $87,745 $103,201 $105,061 $121,173  Retirees:
• Count6 1,0077 959 8 974 1,009 1,031
• Average Age 68.9 68.9 70.0 70.9 71.5
• Average Retirement Age
o Service 57.7 57.7 58.0 58.2 58.2
o Disability 45.6 45.9 46.1 46.3 45.8

May 21, 2024 10

PARTICIPANT STATISTICS
Historical Active and Retiree Counts9

9 Retiree count is subscribers: retirees and surviving spouses 6/30/09 6/30/11 6/30/13 6/30/15 6/30/17 6/30/19 6/30/21 6/30/23 Active 955 923 948 955 967 930 874 902
Retired 710 860 968 1,007 959 974 1,009 1,031
43% 48% 50% 51% 50% 51% 54% 53%
57% 52% 50% 49% 50% 49% 46% 47%
-
500
1,000
1,500
2,000
2,500
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May 21, 2024 11

PARTICIPANT STATISTICS
Participant Statistics
June 30, 2023

10 Based on June 30, 2023 PERSable pay rate.
11 Excludes retirees who have waiv ed coverage, regardless of age.

Group 1 Group 2 Group 3 Group 4 Total
 Actives
• Count n/a n/a 57 845 902
• Average Age n/a n/a 55.8 43.9 44.6
• Average Entry Age n/a n/a 31.5 34.4 34.2
• Average City Service n/a n/a 24.3 9.5 10.4
• Average PERS Service n/a n/a 24.4 10.5 11.4
• Average Salary n/a n/a $134,880 $134,302 $134,338
• Total Salary (000’s)10 n/a n/a 7,688 113,485 121,173  Benefitting Retirees11:
• Count 396 280 165 190 1,031
• Average Age 79.3 70.7 65.7 61.5 71.5
• Avg Service Ret Age 57.3 57.8 59.1 59.0 58.2
• Avg Disability Ret Age 44.7 46.9 51.2 48.1 45.8

May 21, 2024 12

PARTICIPANT STATISTICS
Participant Statistics
June 30, 2021

12 Actual 2020/21 PERSable compensation.
13 Excludes retirees who have waiv ed coverage, regardless of age.

Group 1 Group 2 Group 3 Group 4 Total
 Actives
• Count n/a n/a 69 805 874
• Average Age n/a n/a 54.1 44.2 45.0
• Average Entry Age n/a n/a 31.5 34.0 33.8
• Average City Service n/a n/a 22.6 10.2 11.2
• Average PERS Service n/a n/a 22.8 11.2 12.1
• Average Salary n/a n/a $114,220 $120,720 $120,207
• Total Salary (000’s)12 n/a n/a 7,881 97,180 105,061
 Benefitting Retirees13:
• Count 429 290 152 138 1,009
• Average Age 77.8 68.8 64.0 61.4 70.9
• Avg Service Ret Age 57.5 57.9 59.1 59.4 58.2
• Avg Disability Ret Age 45.5 46.9 51.2 49.3 46.3
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May 21, 2024 13

PARTICIPANT STATISTICS
Data Reconciliation14
6/30/2021 to 6/30/2023
Actives Retirees Disabled Benefic. Total
 June 30, 2021 874 786 144 79 1,883
• New Hires/Rehires 199 - - - 199
• Disabled (8) - 8 - -
• Terminated15 (100) - - - (100)
• Died with Beneficiary16 - (8) (5) 13 -
• Died, no Beneficiary - (25) (7) (10) (42)
• Retired/covered (54) 54 - - -
• Retired/waived (9) - - - (9)
• Waived Retiree - (9) - (1) (10)
• Adjustment/Other - 7 1 4 12
 June 30, 2023 902 805 141 85 1,933

14 Excludes retirees who have waived coverage.
15 All actives in June 30, 2021 valuation and not in June 30, 2023 valuation assumed terminated. 16 Retirees in the June 30, 2021 valuation not in the June 30, 2023 valuation assumed deceased.

May 21, 2024 14

PARTICIPANT STATISTICS

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May 21, 2024 15

ACTUARIAL ASSUMPTIONS HIGHLIGHTS
June 30, 2021 Valuation June 30, 2023 Valuation
 Valuation
Date
 June 30, 2021
 ADC for Fiscal Years
2022/23 & 2023/24
(end of year)
 1 year lag
 June 30, 2023
 ADC for Fiscal Years
2024/25 & 2025/26
(end of year)
 1 year lag
 Funding
Policy
 Full Pre-funding through
CalPERS trust (CERBT)
Strategy #1
 City may contribute additional
amounts based on lower
discount rate
 Same
 Discount Rate  6.25%, net of expenses based on
CERBT Strategy #1
 Same
 General
Inflation
 2.50%  Same

May 21, 2024 16

ACTUARIAL ASSUMPTIONS HIGHLIGHTS
June 30, 2021 Valuation June 30, 2023 Valuation
 Payroll
Increases
 Aggregate Increases: 2.75%
 Merit Increases: CalPERS 2000-
2019 Experience Study
 Same
 Increase to
Group 3 Flat
Dollar Caps17
 ½ of Medical Trend, not less
than assumed inflation (2.50%)
 Same
 Medical
Trend
 Non-Medicare: 6.50% for 2023,
decreasing to an ultimate rate of

3.75% in 2076
 Medicare: 5.65% (non-Kaiser)
and 4.60% (Kaiser) for 2023,
decreasing to an ultimate rate of

3.75% in 2076
 Non-Medicare: 8.50% for
2025, decreasing to an
ultimate rate of 3.45% in 2076
 Medicare: 7.50% (non-Kaiser)
and 6.25% (Kaiser) for 2025,
decreasing to an ultimate rate
of 3.45% in 2076

17 Increase is for purposes of financial projection only and does not imply any obligation to increase the cap in the future.

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May 21, 2024 17

ACTUARIAL ASSUMPTIONS HIGHLIGHTS
June 30, 2021 Valuation June 30, 2023 Valuation
 Participation
at Retirement
 Group 3: 98%
 Group 4: if eligible for City
contribution: 95%; if not: 0%
 Based on Plan experience18
 Same
 Retirement,
Mortality,
Termination,
Disability
 CalPERS 2000-2019 Experience
Study
 Society of Actuaries mortality
improvement scale MP-21
 Same
 Age-related
Claims Costs
for Medicare
Advantage
Plans
 Included
 Due to age-risk adjusted federal
subsidies, no age-based claims
costs were included for
Medicare Advantage plans
 Same

18 Actual participation percentage for Gr oup 3 since 6/30/17 is 100% for Miscellaneous (there are no active Safety members in Group 3). Actual participation percentage for Group 4 since 6/30/17 who are eligible for a City contribution is 91%. Group 4 still has limited actual experience. We recommend continued monitoring for Group 4.

May 21, 2024 18

ACTUARIAL ASSUMPTIONS HIGHLIGHTS
June 30, 2021 Valuation June 30, 2023 Valuation
 Basis for
Assumptions
(6/30/23
Valuation)
 No experience study performed for this Plan
 CalPERS experience study covering 2000 to 2019 experience was used
 Mortality improvement is a Society of Actuaries table  Inflation based on our estimate for the Plan’s long time horizon  Capital market assumptions based on 2021 Foster & Foster stochastic analysis, taking into account capital market assumptions of investment advisory firms
 Medical trends were based on expectations over the short term blended into long term medical trends developed using the Society of Actuaries Getzen Model of Long-Run Medical Cost Trends  Age-based claims costs are based on tables published by the Society of Actuaries and demographic data for the CalPERS health plans provided by CalPERS
 Medical coverage and participation based in part on Plan experience

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May 21, 2024 19

ACTUARIAL ASSUMPTIONS HIGHLIGHTS
CERBT Investment Options

 Asset Allocation
Strategy 1 Strategy 2 Strategy 3
Global Equity 49% 34% 23%
Long US Fixed Income 23% 41% 51%
TIPS 5% 5% 9%
Commodities 3% 3% 3%
Global REITs 20% 17% 14%
Total 100% 100% 100%
CalPERS’ projected 20-year
19 6.0% 5.5% 5.0%

19 CalPERS assumes 2.25% price inflation.

May 21, 2024 20

ACTUARIAL ASSUMPTIONS HIGHLIGHTS
Discount Rate
 Future expected returns
 Stochastic simulations of geometric average returns over 20 years – 5,000 trials  2.50% inflation assumption
 Projections based on 8 independent Investment Advisors 2021 10-year Capital Market Assumptions and where available, investment advisors long-term trends  Confidence levels:

Strategy 1 Strategy 2 Strategy 3
50% Confidence Level 6.25% 5.75% 5.25%
55% Confidence Level 6.00% 5.50% 5.00%
60% Confidence Level 5.75% 5.25% 4.75%
 Expected returns, 50th percentile:

Strategy 1 Strategy 2 Strategy 3
Expected Real Rate of Return20 3.90% 3.39% 2.92%
Inflation Assumption 2.50% 2.50% 2.50%
Investment Expenses (0.05%) (0.05%) (0.05%)
Nominal Rate of Return 6.35% 5.84% 5.37%
Rounded to nearest 0.25% 6.25% 5.75% 5.25%
 City currently in Strategy 1: Recommend 6.25% discount rate

20 Includes investment expenses
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May 21, 2024 21

ACTUARIAL METHODS
Method June 30, 2021 Valuation June 30, 2023 Valuation
 Cost Method  Entry Age Normal Level %
of Pay
 Same
 Unfunded Liability
Amortization
 22 years closed period
 Level % of pay (2.75%
annual escalation)
 Sensitivity analysis:
20 & 18 years
 20 years closed period
 Level % of pay (2.75%
annual escalation)
 Sensitivity analysis:
18 years
 Actuarial Asset Value  Market Value of Assets21  Same  Future New Entrants  Closed group – no new participants  Implied Subsidy  Implied subsidy valued
 Plan Continuance  For purposes of financial projections, the plan and benefits are assumed to continue unchanged. The calculation of this obligation does not imply that there is any legal liability to provide or continue providing the benefits valued.

21 Using Market Value of Assets to determine the ADC will result in more volatile future ADCs than if a smoothed Market Value were used. For funding purposes, market value includes accrued contributions made for a previous fiscal year.

May 21, 2024 22

ACTUARIAL METHODS

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May 21, 2024 23
ASSETS
Market Value of Plan Assets (MVA)
Invested in CERBT Strategy 1 Fund
(Amounts in 000’s)

2019/20

2020/21

2021/22

2022/23
 MVA (Beg. of Year) $118,497 $126,520 $164,170 $144,745 • Contributions 3,747 2,946 22 2,904 2,032
• Benefit Payments23 - - - -
• Admin. Expenses (59) (71) (80) (72)
• Investment Return24 4,335 34,776 (22,249) 9,356  MVA (End of Year) 126,520 164,170 144,745 156,061
 Approx. Annual Return 3.6% 27.5% (13.5)% 6.4%

22 Includes $1,358 paid on 1/10/2022; MVA shown is not the same as market value for financial reporting purposes. 23 Benefit Payments made outside of trust by City in years other than 2018/19. Refer to Slide 5 for fiscal year amounts. 24 Net of investment expenses.

May 21, 2024 24
ASSETS
Historical Returns

08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 Market Value -22.5% 15.1% 24.4% 0.1% 11.2% 18.2% -0.2% 1.1% 10.4% 7.8% 6.3% 3.6% 27.5% -13.5% 6.4% Expected Return 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.61% 7.25% 7.25% 6.75% 6.75% 6.75% 6.75% 6.25% 6.25% (15%)
(10%)
(5%)
0%
5%
10%
15%
20%
25%
30%
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 25

RESULTS
Actuarial Obligations
(Amounts in 000’s)

 Valuation Date 6/30/2021 6/30/2023
 Discount Rate 6.25% 6.25%
 Present Value of Benefits (PVB)
• Actives (future retirees) $131 ,926 $154 ,864
• Retirees 169,243 192,253
• Total 301 ,169 347 ,117
 Actuarial Accrued Liability (AAL)
• Actives (future retirees) 74 ,954 84 ,319
• Retirees 169,243 192,253
• Total 244 ,197 276 ,572
 Market Value of Assets (MVA) 164,170 156,061
 Unfunded AAL (UAAL) 80 ,027 120 ,511
 Funded Ratio 67% 56%
 Normal Cost25 6,316 7 ,614
 Pay-As-You-Go Cost (Cash) 11,190 12 ,827
 Pay-As-You-Go Cost (IS) 3,025 2 ,745

25 Includes Administration fees.

May 21, 2024 26

RESULTS
Historical Funded Status
(Amounts in 000’s)

24% 27%
29%
33%
37%
49%
67% 56%
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
1/1/11 6/30/11 6/30/13 6/30/15 6/30/17 6/30/19 6/30/21 6/30/23 Retiree pay-go Retiree AAL less pay-go Active AAL AVA MVA X% Funded Ratio
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 27

RESULTS
Actuarial Gain/Loss
(Amounts in $000’s)

AAL Assets UAAL
 Actual 6/30/21 $244,197 $164,170 $80,027
 Expected 6/30/23 260,018 184,228 75,790
 Experience (Gains)/Losses
• Premiums/Caps different than expected 286 286
• Demographic & other (2,315) (2,315)
 Assumption Changes increasing/(decreasing) AAL
• Medical Plan election percentages changed 1,269 1,269 • Updated medical trend 17,314 17,314
 Contribution and Benefit Payment Gain 6,131 (6,131)  Investment Loss (34,297) 34,297
 Total UAAL (Gain)/Loss 16,554 (28,167) 44,721
 Actual 6/30/23 276,572 156,061 120,511

May 21, 2024 28

RESULTS
Actuarially Determined Contribution (ADC)
(Amounts in 000’s)

6/30/21 Valuation 6/30/23 Valuation
2022/23 2023/24 2024/25 2025/26
 Discount Rate 6.25% 6.25%
 ADC - $
• Normal Cost $ 6,196 $ 6,370 $ 7,489 $ 7,674
• Administrative Expenses26 120 126 125 133
• UAAL Amortization 5,112 5,253 8,802 9,044
• Total 11,428 11,749 16,416 16,851
 Projected Payroll 110,919 113,969 127,929 131,447
 ADC – Percent of Pay
• Normal Cost 5.6% 5.6% 5.9% 5.8%
• Administrative Expenses 0.1% 0.1% 0.1% 0.1%
• UAAL Amortization 4.6% 4.6% 6.9% 6.9%
• Total 10.3% 10.3% 12.8% 12.8%

26 Includes PEMHCA and CE RBT administration fees.

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

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RESULTS
Actuarially Determined Contribution (ADC) Payment to Trust (Amounts in 000’s)

6/30/23 Valuation
2024/25 2025/26
 Discount Rate 6.25%
 ADC - $
• Normal cost $ 7,489 $ 7,674
• Administrative expenses27 125 133
• UAAL amortization 8,802 9,044
• Total 16,416 16,851

• Less: Implied subsidy benefit payments 2,745 2,871 • Remaining ADC 13,671 13,980
• Less: Estimated cash benefit payments 12,827 13,565
• Total Trust contribution
(If negative, indicates a reimbursement for City
out-of-pocket payments may be requested.)
844 415

27 Includes PEMHCA and CE RBT administration fees.

May 21, 2024 30

RESULTS
Historical Recommended Funding Contributions
(Amounts in 000’s)
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

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RESULTS
Amortization Bases & Payments
(Amounts in 000’s)

6/30/21 Valuation 6/30/23 Valuation
6/30/22 6/30/23 6/30/24 6/30/25
 Discount Rate 6.25% 6.25%
 Payment Escalator 2.75% 2.75%
 UAAL Balance $ 76,159 $ 75,807 $ 122,790 $ 121,662
 Amortization Payment 5,112 5,253 8,802 9,044
 Amortization Period
(years) 22 21 20 19

May 21, 2024 32

RESULTS
10 Year Contribution Projection
(Amounts in 000’s)

FYE ADC28
Contribution
Payroll
ADC
% of
Pay

Fund
%
Cash
Benefit
Payment
Implied
Subsidy
BP
Trust
Pre-
Funding Total
UAAL
Beg. Of
FY
2025 $16,416 $12,827 $2,745 $844 $16,416 $127,929 12.8% $122,791 57% 2026 16,851 13,565 2,871 415 16,851 131,447 12.8% 121,662 59% 2027 17,318 14,286 3,017 15 17,318 135,062 12.8% 120,223 61% 2028 17,785 14,868 2,992 (75) 17,785 138,776 12.8% 118,444 62% 2029 18,276 15,590 3,089 (403) 18,276 142,593 12.8% 116,298 64% 2030 18,775 16,348 3,285 (858) 18,775 146,514 12.8% 113,755 66% 2031 19,271 16,933 3,312 (974) 19,271 150,543 12.8% 110,784 68% 2032 19,803 17,554 3,434 (1,185) 19,803 154,683 12.8% 107,350 69% 2033 20,347 18,086 3,516 (1,255) 20,347 158,937 12.8% 103,416 71% 2034 20,882 18,626 3,575 (1,319) 20,882 163,307 12.8% 98,944 73%

28 Actuarially Determined Contribution
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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RESULTS

-$15
-$10
-$5
$0
$5
$10
$15
$20
$25
$30
$ Millions
Net Trust Payment/Reimbursement Benefit Payments Total ADC ADC, Benefit and Trust Payment/Reimbursement Projection (6.25% Discount Rate, 20 years level % of pay amortization)

May 21, 2024 34

RESULTS

0%
20%
40%
60%
80%
100%
120%
$0
$20
$40
$60
$80
$100
$120
$140
Funded Ratio
UAAL ($ Millions)
UAAL Funded Ratio
UAAL and Funded Ratio Projection
(6.25% Discount Rate, 20 years amortization)
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 35

RESULTS
% of Total Actuarial Accrued Liability for Actives and Retirees Miscellaneous

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
6/30/09 6/30/11 6/30/13 6/30/15 6/30/17 6/30/19 6/30/21 6/30/23 Actives Retirees

May 21, 2024 36

RESULTS
% of Total Actuarial Accrued Liability for Actives and Retirees Safety

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
6/30/09 6/30/11 6/30/13 6/30/15 6/30/17 6/30/19 6/30/21 6/30/23 Actives Retirees
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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RESULTS
This chart excludes the Implied Subsidy
and is provided for informational purposes only
(Amounts in 000’s)

Cash Benefit
 Present Value of Benefits $ 294,841
 Funded Status 6/30/23
• Actuarial Accrued Liability 232,822
• Actuarial Value of Assets29 156,061
• Unfunded AAL 76,761
 Funded Ratio 67.0%
 ADC 2024/25
• Normal Cost 6,570
• Administrative Expenses 125
• UAAL Amortization 5,590
• Total 12,285
• ADC % of Payroll 9.6%

29 All assets allocated to the cash benefit for illustrative purposes only.

May 21, 2024 38

RESULTS

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2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

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RESULTS - DETAILS
Actuarial Obligations by Pre/Post 65 Benefits
June 30, 2023
(Amounts in 000’s)

Benefits
Paid
Before
Age 65
Benefits
Paid On
or After
Age 65 Total
 Present Value of Benefits
• Actives (future retirees) $78,087 $76,777 $154,864
• Retirees 48,369 143,884 192,253
• Total 126,456 220,661 347,117
 Actuarial Accrued Liability
• Actives (future retirees) 40,543 43,776 84,319
• Retirees 48,369 143,884 192,253
• Total 88,912 187,660 276,572
 Normal Cost 2024/2530 3,872 3,741 7,614

30 Includes Administration fees.

May 21, 2024 40

RESULTS - DETAILS
Actuarial Obligations by Group
June 30, 2023
(Amounts in 000’s)

Group 1 Group 2 Group 3 Group 4 Total
 Present Value of Benefits
• Actives (future retirees) $ - $ - $12,507 $142,358 $154,864 • Retirees 47,911 53,548 36,227 54,567 192,253
• Total 47,911 53,548 48,734 196,925 347,117
 Actuarial Accrued
Liability
• Actives (future retirees) - - 10,597 73,722 84,319
• Retirees 47,911 53,548 36,227 54,567 192,253
• Total 47,911 53,548 46,824 128,289 276,572
 Normal Cost 2024/2531 n/a n/a 353 7,261 7,614
 NC as % of Payroll n/a n/a 5.0% 6.0% 6.0%
 Active Count n/a n/a 57 845 902
 Projected Payroll n/a n/a 7,128 120,801 127,929

31 Includes Administration fees.

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 41

RESULTS - DETAILS
Actuarial Obligations by Cash/Implied Subsidy
June 30, 2023
(Amounts in 000’s)

Cash
Subsidy
Implied
Subsidy Total
 Present Value of Benefits
• Actives (future retirees) $134,797 $20,067 $154,864
• Retirees 160,044 32,209 192,253
• Total 294,841 52,276 347,117
 Actuarial Accrued Liability
• Actives (future retirees) 72,778 11,542 84,319
• Retirees 160,044 32,209 192,253
• Total 232,822 43,751 276,572
 Market Value of Assets32 131,374 24,687 156,061
 Unfunded AAL 101,448 19,064 120,511
 Normal Cost 2024/2533 6,695 919 7,614
 Pay-As-You-Go Cost 2024/25 12,827 2,745 15,572

32 Allocated in proportion to AAL for illustrative purposes. 33 Includes Administration fees.

May 21, 2024 42

RESULTS - DETAILS
Actuarially Determined Contribution by Cash/Implied Subsidy 2024/25 Fiscal Year
(Amounts in 000’s)

Cash
Subsidy
Implied
Subsidy Total
 ADC - $
• Normal Cost $ 6,570 $ 919 $ 7,489
• Administrative Expenses 125 - 125
• UAAL Amortization 7,424 1,378 8,802
• ADC 14,119 2,297 16,416
 Projected Payroll 127,929 127,929 127,929
 ADC - % of Payroll
• Normal Cost 5.1% 0.7% 5.9%
• Administrative Expenses 0.1% 0.0% 0.1%
• UAAL Amortization 5.8% 1.1% 6.9%
• ADC 11.0% 1.8% 12.8%

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 43

RESULTS - DETAILS
Actuarial Obligations by Misc/Safety
June 30, 2023
(Amounts in 000’s)

Misc Safety Total
 Present Value of Benefits
• Actives (future retirees) $112,057 $42,807 $154,864
• Retirees 120,219 72,034 192,253
• Total 232,276 114,841 347,117
 Actuarial Accrued Liability
• Actives (future retirees) 63,059 21,260 84,319
• Retirees 120,219 72,034 192,253
• Total 183,278 93,294 276,572
 Market Value of Assets34 103,418 52,643 156,061
 Unfunded AAL 79,860 40,651 120,511
 Normal Cost 2024/2535 5,495 2,118 7,614
 Pay-As-You-Go Cost 2024/25 10,278 5,294 15,572

34 Allocated in proportion to the Actuarial Accrued Liability. 35 Includes Administration fees.

May 21, 2024 44

RESULTS - DETAILS
Actuarially Determined Contribution by Misc/Safety
2024/25 Fiscal Year
(Amounts in 000’s)

Misc Safety Total
 ADC - $
• Normal Cost $ 5,412 $ 2,077 $ 7,489
• Administrative Expenses 83 42 125
• UAAL Amortization 5,848 2,954 8,802
• ADC 11,344 5,072 16,416
 Projected Payroll 101,964 25,965 127,929
 ADC - % of Payroll
• Normal Cost 5.3% 8.0% 5.9%
• Administrative Expenses 0.1% 0.2% 0.1%
• UAAL Amortization 5.7% 11.4% 6.9%
• ADC 11.1% 19.5% 12.8%

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 45

RESULTS - DETAILS
Actuarial Obligations by Bargaining Unit
June 30, 2023
(Amounts in 000’s)

FCA IAFF M/C PAPOA PMA SEIU UMPAPA Total
 PVB
• Actives $1,362 $20,223 $32,491 $17,294 $2,521 $72,048 $8,927 $154,864 • Retirees 2,714 34,636 52,789 25,202 2,593 65,881 8,438 192,253 • Total 4,076 54,859 85,280 42,496 5,114 137,929 17,365 347,117  AAL
• Actives 1,074 9,545 18,930 7,485 2,058 38,985 6,242 84,319 • Retirees 2,714 34,636 52,789 25,202 2,593 65,881 8,438 192,253 • Total 3,788 44,181 71,719 32,687 4,651 104,866 14,680 276,572  MVA36 2,137 24,930 40,469 18,444 2,624 59,173 8,283 156,061  UAAL 1,651 19,251 31,250 14,243 2,027 45,693 6,397 120,511  NC 24/2537 48 928 1,617 981 102 3,583 356 7,614
 Pay-Go 205 2,624 4,315 1,771 174 5,749 734 15,572

36 Allocated in proportion to the Actuarial Accrued Liability. 37 Includes Administration fees.

May 21, 2024 46

RESULTS - DETAILS
Actuarially Determined Contribution by Bargaining Unit
2024/25 Fiscal Year
(Amounts in 000’s)

FCA IAFF M/C PAPOA PMA SEIU UMPAPA Total
 ADC - $
• Normal Cost $ 46 $ 908 $ 1,585 $ 966 $ 99 $ 3,536 $ 350 $ 7,489 • Admin. Expenses 2 20 32 15 2 48 7 125
• UAAL Amort 119 1,393 2,265 1,045 150 3,363 468 8,802 • ADC 166 2,321 3,881 2,026 252 6,947 824 16,416
 Projected Payroll 803 10,826 34,117 11,174 1,880 59,705 9,424 127,929  ADC - %
• Normal Cost 5.7% 8.4% 4.6% 8.6% 5.3% 5.9% 3.7% 5.9%
• Admin. Expenses 0.2% 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% • UAAL Amort 14.8% 12.9% 6.6% 9.3% 8.0% 5.6% 5.0% 6.9% • ADC 20.7% 21.4% 11.4% 18.1% 13.4% 11.6% 8.7% 12.8%

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 47

RESULTS - DETAILS
Actuarially Determined Contribution by Bargaining Unit
2025/26 Fiscal Year
(Amounts in 000’s)

FCA IAFF M/C PAPOA PMA SEIU UMPAPA Total
 ADC - $
• Normal Cost $ 47 $ 931 $ 1,624 $ 990 $ 102 $ 3,623 $ 358 $ 7,674 • Admin. Expenses 2 21 34 16 2 51 7 133
• UAAL Amort 122 1,431 2,327 1,073 154 3,456 481 9,044 • ADC 171 2,383 3,985 2,079 259 7,130 846 16,851
 Projected Payroll 826 11,123 35,055 11,481 1,932 61,347 9,683 131,447  ADC - %
• Normal Cost 5.7% 8.4% 4.6% 8.6% 5.3% 5.9% 3.7% 5.8%
• Admin. Expenses 0.2% 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% • UAAL Amort 14.8% 12.9% 6.6% 9.3% 8.0% 5.6% 5.0% 6.9% • ADC 20.7% 21.4% 11.4% 18.1% 13.4% 11.6% 8.7% 12.8%

May 21, 2024 48

RESULTS - DETAILS

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Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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SENSITIVITY ANALYSIS
Discount Rate Sensitivity
(Amounts in 000’s)

CERBT Strategy
#1 (Current) #2 #3
 Discount Rate 6.25% 5.75% 5.25%
 Present Value of Benefits $347,117 $375,439 $407,741
 Funded Status 6/30/23
• Actuarial Accrued Liability 276,572 293,120 311,327
• Assets 156,061 156,061 156,061
• Unfunded AAL 120,511 137,059 155,266
 Funded Ratio 56.4% 53.2% 50.1%
 ADC 2024/25
• Normal Cost 7,489 8,379 9,394
• Administrative Expenses 125 125 125
• UAAL Amortization38 8,802 9,582 10,377
• Total 16,416 18,085 19,896
• ADC % of Payroll 12.8% 14.1% 15.6%

38 UAAL amortized over 20 years for all scenarios.

May 21, 2024 50

SENSITIVITY ANALYSIS
Amortization Period Sensitivity
Discount Rate – 6.25%, Level % of Pay with 2.75% Payment Escalation (Amounts in 000’s)

 Amortization Period
Current
20 Years 18 Years
 Funded Status 6/30/23
• Actuarial Accrued Liability $276,572 $276,572
• Assets 156,061 156,061
• Unfunded AAL 120,511 120,511
 Total Projected Payroll 2024/25 127,929 127,929
 ADC 2024/25
• Normal Cost 7,489 7,489
• Administrative Expenses 125 125
• UAAL Amortization 8,802 9,492
• Total 16,416 17,105
• ADC % of Payroll 12.8% 13.4%

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 51

SENSITIVITY ANALYSIS
Amortization Period Sensitivity
Discount Rate – 5.75%, Level % of Pay with 2.75% Payment Escalation (Amounts in 000’s)

 Amortization Period
Current
20 Years 18 Years
 Funded Status 6/30/23
• Actuarial Accrued Liability $293,120 $293,120
• Assets 156,061 156,061
• Unfunded AAL 137,059 137,059
 Total Projected Payroll 2024/25 127,929 127,929
 ADC 2024/25
• Normal Cost 8,379 8,379
• Administrative Expenses 125 125
• UAAL Amortization 9,582 10,371
• Total 18,085 18,875
• ADC % of Payroll 14.1% 14.8%

May 21, 2024 52

SENSITIVITY ANALYSIS
Actuarial Obligations by Bargaining Unit – 5.75%
June 30, 2023
(Amounts in 000’s)

FCA IAFF M/C PAPOA PMA SEIU UMPAPA Total
 PVB
• Actives $1,487 $22,844 $36,048 $19,489 $2,733 $80,761 $9,832 $173,194 • Retirees 2,865 36,463 55,395 26,661 2,773 69,183 8,905 202,245 • Total 4,352 59,307 91,443 46,150 5,506 149,944 18,737 375,439  AAL
• Actives 1,153 10,284 20,354 8,089 2,200 42,076 6,719 90,875 • Retirees 2,865 36,463 55,395 26,661 2,773 69,183 8,905 202,245 • Total 4,018 46,747 75,749 34,750 4,973 111,259 15,624 293,120  MVA39 2,139 24,889 40,330 18,501 2,648 59,236 8,318 156,061  UAAL 1,879 21,858 35,419 16,249 2,325 52,023 7,306 137,059  NC 24/2540 54 1,039 1,797 1,091 115 4,007 399 8,504
 Pay-Go 205 2,624 4,315 1,771 174 5,749 734 15,572

39 Allocated in proportion to the Actuarial Accrued Liability. 40 Includes Administration fees.

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 53

SENSITIVITY ANALYSIS
10 Year Contribution Projection – 5.75%
13 Year Amortization
(Amounts in 000’s)

FYE ADC41
Contribution
Payroll
ADC
% of
Pay

Fund
%
Cash
Benefit
Payment
Implied
Subsidy
BP
Trust
Pre-
Funding Total
UAAL
Beg. Of
FY
2025 $21,996 $12,827 $2,745 $6,424 $21,996 $127,929 17.2% $140,372 54% 2026 22,551 13,565 2,871 6,115 22,551 131,447 17.2% 134,951 57% 2027 23,180 14,286 3,017 5,877 23,180 135,062 17.2% 128,847 60% 2028 23,812 14,868 2,992 5,952 23,812 138,776 17.2% 122,011 63% 2029 24,474 15,590 3,089 5,795 24,474 142,593 17.2% 114,390 67% 2030 25,147 16,348 3,285 5,514 25,147 146,514 17.2% 105,928 70% 2031 25,821 16,933 3,312 5,576 25,821 150,543 17.2% 96,567 73% 2032 26,538 17,554 3,434 5,550 26,538 154,683 17.2% 86,242 77% 2033 27,272 18,086 3,516 5,670 27,272 158,937 17.2% 74,886 80% 2034 27,999 18,626 3,575 5,798 27,999 163,307 17.1% 62,429 84%

41 Actuarially Determined Contribution

May 21, 2024 54

COMPARISON TO OTHER AGENCIES

50% of 90% of
results results
are are
within within
this this
range range
5th Percentile
75th Percentile
50th Percentile
25th Percentile
Foster & Foster California OPEB Database
Sample Percentile Graph
95th Percentile
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
Percent of Pay
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
Pg.
118

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May 21, 2024 55

COMPARISON TO OTHER AGENCIES

NC ADC NC ADC
95th Percentile 10.9% 24.2% 12.3% 35.5%
75th Percentile 5.4% 10.8% 5.0% 15.8%
50th Percentile 2.8% 5.4% 2.6% 6.2%
25th Percentile 1.5% 2.6% 1.5% 3.3%
5th Percentile 0.7% 0.7% 0.7% 0.9%
`
Percent of Pay (
♦) 5.3% 11.1% 8.0% 19.5%
Percentile 74% 76% 88% 84%
Miscellaneous Safety
Discount Rate = 6.25%, Average Amortization Period = 20.0 Years 0%
5%
10%
15%
20%
25%
30%
35%
40%
Percent of Pay
Foster & Foster California OPEB Database
Normal Cost & Actuarially Determined Contribution

May 21, 2024 56

COMPARISON TO OTHER AGENCIES

General
Miscellaneous Safety
95th Percentile 317% 440%
75th Percentile 173% 202%
50th Percentile 87% 88%
25th Percentile 40% 48%
5th Percentile 14% 15%
Percent of Pay (
♦) 185% 369%
Percentile 79% 91%
Discount Rate = 6.25%
0%
50%
100%
150%
200%
250%
300%
350%
400%
450%
500%
Percent of Pay
Foster & Foster California OPEB Database
Actuarial Accrued Liability
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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119

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May 21, 2024 57

ACTUARIAL CERTIFICATION
This report presents the City of Palo Alto Retiree Healthcare Plan (“Plan”) June 30, 2023 actuarial valuation. The purpose of this valuation is to:
 Determine the June 30, 2023 Benefit Obligations,
 Determine the Plan’s June 30, 2023 Funded Status, and  Calculate the 2024/25 and 2025/26 Actuarially Determined Contributions.

The report provides information intended for funding the City’s Plan, but may not be appropriate for other purposes.

Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as: plan experience differing from that anticipated by the assumptions; changes in assumptions; changes expected as part of the natural progression of the plan; and changes in plan provisions or applicable law. Actuarial models necessarily rely on the use of estimates and are sensitive to changes. Small variations in estimates may lead to significant changes in actuarial measurements. Due to the limited scope of this assignment, we did not perform an analysis of the potential range of such measurements.

The valuation is based on Plan provisions, participant data, and asset information provided by the City as summarized in this report, which we relied on and did not audit. We reviewed the participant data for reasonableness.

To the best of our knowledge, this report is complete and accurate and has been conducted using generally accepted actuarial principles and practices. As members of the American Academy of Actuaries meeting the Academy Qualification Standards, we certify the actuarial results and opinions herein.

Respectfully submitted,

Drew Ballard, FSA, MAAA, EA
Foster & Foster, Inc.

Catherine A. Wandro, ASA, MAAA
Foster & Foster, Inc.

May 21, 2024 58

EXHIBITS
Topic Page
Premiums E- 1
Data Summary E- 5
Additional Actuarial Assumptions E-23
Results by Fund E-31
Results by GF Department E-33
Definitions E-35

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 E- 1

PREMIUMS
2023 PEMHCA Monthly Premiums
Region 1
Non-Medicare Eligible Medicare Eligible
Medical Plan Single 2-Party Family Single 2-Party Family Anthem Select $1,128.83 $2,257.66 $2,934.96 $413.59 $827.18 $1,240.77 Anthem Traditional 1,210.71 2,421.42 3,147.85 413.59 827.18 1,240.77 Blue Shield Access+ 1,035.21 2,070.42 2,691.55 361.90 723.80 1,085.70 Blue Shield Trio 888.94 1,777.88 2,311.24 361.90 723.80 1,085.70 Health Net SmartCare 1,174.50 2,349.00 3,053.70 n/a n/a n/a Kaiser 913.74 1,827.48 2,375.72 283.25 566.50 849.75
Kaiser Summit n/a n/a n/a 336.29 672.58 1,008.87
UnitedHealthcare Alliance 1,044.07 2,088.14 2,714.58 n/a n/a n/a UnitedHealthcare Group n/a n/a n/a 299.68 599.36 899.04 UnitedHealthcare Edge n/a n/a n/a 357.70 715.40 1,073.10 Western Health Advantage 760.17 1,520.34 1,976.44 331.11 662.22 993.33 PERS Platinum 1,200.12 2,400.24 3,120.31 420.02 840.04 1,260.06 PERS Gold 825.61 1,651.22 2,146.59 392.71 785.42 1,178.13 PORAC 825.00 1,875.00 2,300.00 465.00 1,030.00 1,395.00

May 21, 2024 E- 2

PREMIUMS
2024 PEMHCA Monthly Premiums
Region 1
Non-Medicare Eligible Medicare Eligible
Medical Plan Single 2-Party Family Single 2-Party Family Anthem Select $1,138.86 $2,277.72 $2,961.04 $405.83 $811.66 $1,217.49 Anthem Traditional 1,339.70 2,679.40 3,483.22 405.83 811.66 1,217.49 Blue Shield Access+ 1,076.84 2,153.68 2,799.78 392.68 785.36 1,178.04 Blue Shield Trio 946.84 1,893.68 2,461.78 392.68 785.36 1,178.04 Kaiser 1,021.41 2,042.82 2,655.67 324.79 649.58 974.37
Kaiser Summit n/a n/a n/a 386.55 773.10 1,159.65
UnitedHealthcare Alliance 1,091.13 2,182.26 2,836.94 n/a n/a n/a UnitedHealthcare Harmony 937.39 1,874.78 2,437.21 n/a n/a n/a UnitedHealthcare Group n/a n/a n/a 341.72 683.44 1,025.16 UnitedHealthcare Edge n/a n/a n/a 366.01 732.02 1,098.03 Western Health Advantage 807.23 1,614.46 2,098.80 268.62 537.24 805.86 PERS Platinum 1,314.27 2,628.54 3,417.10 448.15 896.30 1,344.45 PERS Gold 914.82 1,829.64 2,378.53 406.60 813.20 1,219.80 PORAC 931.00 2,117.00 2,651.00 465.00 1,030.00 1,395.00

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 E- 3

PREMIUMS
PEMHCA Monthly Premium Increases/(Decreases)
Region 1

Non-Medicare Eligible Medicare Eligible
Medical Plan 2023 2024 2023 2024
Anthem Select 11.1% 0.9% 14.8% (1.9%)
Anthem Traditional (7.2%) 10.7% 14.8% (1.9%)
Blue Shield Access+ (7.2%) 4.0% 2.5% 8.5%
Blue Shield Trio (1.1%) 6.5% 2.5% 8.5%
Health Net SmartCare 1.9% n/a n/a n/a
Kaiser 6.6% 11.8% (6.4%) 14.7%
Kaiser Summit n/a n/a n/a 14.9%
UnitedHealthcare Alliance 2.3% 4.5% n/a n/a
UnitedHealthcare Group n/a n/a 1.7% 14.0%
UnitedHealthcare Edge n/a n/a 3.0% 2.3%
Western Health Advantage 2.6% 6.2% 5.1% (18.9%)
PERS Platinum 13.5% 9.5% 10.0% 6.7%
PERS Gold 17.7% 10.8% 4.1% 3.5%
PORAC 3.3% 12.8% 0.9% 0.0%

May 21, 2024 E- 4

PREMIUMS

This page intentionally blank

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2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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DATA SUMMARY
Participant Statistics by Bargaining Unit
June 30, 2023

FCA IAFF M/C PAPOA PMA SEIU UMPAPA Total
 Actives
• Count 4 84 202 66 7 494 45 902
• Avg Age 48.0 39.1 46.9 38.9 48.9 44.8 50.5 44.6
• Avg City Svc 22.4 9.8 10.7 9.2 23.4 9.7 16.4 10.4
• Avg PERS Svc 22.4 10.3 12.4 10.2 24.2 10.4 17.6 11.4
• Avg Salary $190,356 $122,075 $159,976 $160,358 $254,449 $114,477 $198,351 $134,338 • Total Salary42 $761 $10,254 $32,315 $10,584 $1,781 $56,552 $8,926 $121,173  Retirees43:
• Count 8 147 313 96 6 432 29 1,031
• Avg Age 64.3 71.4 73.0 66.4 53.2 72.6 62.9 71.5
• Avg Service
Ret Age 55.8 54.7 58.1 52.5 50.4 59.7 58.2 58.2
• Avg Disab Ret
Age 50.1 48.8 50.5 41.8 n/a 46.7 n/a 45.8

42 Amount in 000’s. Based on June 30, 2023 PERSable pay rate. 43 Excludes retirees who have waived coverage.

May 21, 2024 E- 6

DATA SUMMARY
Participant Statistics by Bargaining Unit
June 30, 2021

FCA IAFF M/C PAPOA PMA SEIU UMPAPA Total
 Actives
• Count 4 80 195 68 6 477 44 874
• Avg Age 42.6 42.5 47.3 39.8 46.9 44.8 49.1 45.0
• Avg City Svc 18.1 12.8 10.6 10.2 22.1 10.6 17.3 11.2 • Avg PERS Svc 18.1 13.3 12.2 11.2 23.1 11.2 18.1 12.1
• Avg Salary $209,498 $145,878 $134,380 $152,938 $228,619 $98,486 $172,711 $120,207 • Total Salary44 $838 $11,670 $26,204 $10,400 $1,372 $46,978 $7,599 $105,061  Retirees45:
• Count 6 148 307 89 5 430 24 1,009
• Avg Age 64.7 71.0 72.0 66.9 57.5 71.6 62.2 70.9
• Avg Service
Ret Age 56.7 54.6 58.3 52.3 50.4 59.6 58.8 58.2
• Avg Disab Ret
Age 50.1 48.8 50.5 42.0 n/a 48.0 n/a 46.3

44 Amount in 000’s. Actual 2020/21 PERSable compensations. 45 Excludes retirees who have waived coverage.

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 E- 7

DATA SUMMARY
Participant Statistics by CalPERS Pension Category
June 30, 2023

46 Based on June 30, 23 PERSable payrate.
47 Excludes retirees who have waived coverage.

Miscellaneous Police Fire Total
 Actives
• Count 738 72 92 902
• Average Age 45.6 40.3 39.9 44.6
• Average City Service 10.3 10.8 10.8 10.4
• Average PERS Service 11.3 11.8 11.2 11.4
• Average Salary $130,866 $173,099 $131,856 $134,338
• Total Salary (000’s)46 $96,579 $12,463 $12,131 $121,173  Retirees47:
• Count 751 113 167 1,031
• Average Age 72.4 65.9 71.2 71.5
• Avg Service Ret Age 59.2 52.2 54.7 58.2
• Avg Disability Ret Age 47.1 41.9 48.9 45.8

May 21, 2024 E- 8

DATA SUMMARY
Participant Statistics by CalPERS Pension Category
June 30, 2021

48 Actual 2020/21 PERSable compensations.
49 Excludes retirees who have waived coverage.

Miscellaneous Police Fire Total
 Actives
• Count 711 76 87 874
• Average Age 45.7 40.7 42.7 45.0
• Average City Service 11.0 11.0 13.2 11.2
• Average PERS Service 11.9 12.0 13.7 12.1
• Average Salary $112,031 $161,950 $150,562 $120,207
• Total Salary (000’s)48 $79,654 $12,308 $13,099 $105,061  Retirees49:
• Count 739 105 165 1,009
• Average Age 71.6 66.3 70.7 70.9
• Avg Service Ret Age 59.2 52.0 54.5 58.2
• Avg Disability Ret Age 48.1 42.1 48.9 46.3
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 E- 9

DATA SUMMARY
Medical Plan Participation – June 30, 2023

All Retirees
Medical Plan Actives Under 65 65 or Older Total
Miscellaneous/Safety M S M S M S M S
Anthem Select 2% 2% 3% - 1% - 1% -
Anthem Traditional 3% 1% 5% 4% 6% 5% 6% 5%
Blue Shield Access+ 10% 3% 7% 3% 1% 1% 3% 2%
Blue Shield Trio - - - 1% - - - -
Health Net SmartCare - - 1% - - - - -
Kaiser 68% 50% 43% 26% 29% 21% 32% 23%
Kaiser Summit - - - - 2% - 2% -
UnitedHealthcare - - 1% 1% 17% 10% 13% 7%
UnitedHealthcare Edge - - - - - - - -
Western Health Advantage - 1% - - - - - -
PERS Gold 7% 4% 4% - 1% - 1% -
PERS Platinum 10% 2% 35% 16% 42% 47% 41% 34%
PORAC - 37% 1% 49% 1% 16% 1% 29%
Total 100% 100% 100% 100% 100% 100% 100% 100%

May 21, 2024 E- 10

DATA SUMMARY
Medical Plan Participation – June 30, 2021

All Retirees
Medical Plan Actives Under 65 65 or Older Total
Miscellaneous/Safety M S M S M S M S
Anthem Select 6% 3% 5% 1% - - 2% -
Anthem Traditional 4% 1% 9% 8% 6% 5% 6% 6%
Blue Shield Access+ - - 3% 7% - - 1% 3%
Health Net SmartCare 1% 1% 1% 1% - - - -
Kaiser 65% 51% 40% 36% 30% 23% 32% 29%
UnitedHealthcare - - 1% 2% 18% 13% 14% 8%
Western Health Advantage - - 1% - - - - -
PERSCare - - 4% 9% 25% 37% 20% 25%
PERS Choice 22% 3% 32% 3% 21% 15% 24% 10%
PERS Select 1% 1% 3% - - - 1% -
PORAC - 40% 1% 32% - 8% - 19%
Total 100% 100% 100% 100% 100% 100% 100% 100%
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 E- 11

DATA SUMMARY
Active Medical Coverage – Miscellaneous

Medical Plan Single 2-Party Family Waived Total
Anthem Select 3 3 5 - 11
Anthem Traditional 9 3 5 - 17
Blue Shield Access+ 15 18 31 - 64
Blue Shield Trio - - 1 - 1
Health Net SmartCare - - 1 - 1
Kaiser 162 90 200 - 452
Western Health Advantage - - 1 - 1
PERS Gold 13 11 20 - 44
PERS Platinum 26 12 30 - 68
PORAC 1 - - - 1
Waived - - - 78 78
Total 229 137 294 78 738
% as of June 30, 2023 31% 18% 40% 11% 100%
% as of June 30, 2021 30% 22% 40% 9% 100%

May 21, 2024 E- 12

DATA SUMMARY
Active Medical Coverage – Safety

Medical Plan Single 2-Party Family Waived Total
Anthem Select 1 - 2 - 3
Anthem Traditional 1 - - - 1
Blue Shield Access+ 1 - 3 - 4
Blue Shield Trio - - - - -
Health Net SmartCare - - - - -
Kaiser 23 15 39 - 77
Western Health Advantage - - 1 - 1
PERS Gold 5 - 1 - 6
PERS Platinum 1 1 1 - 3
PORAC 7 7 43 - 57
Waived - - - 12 12
Total 39 23 90 12 164
% as of June 30, 2023 24% 14% 55% 7% 100%
% as of June 30, 2021 20% 14% 63% 2% 100%
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 E- 13

DATA SUMMARY
Retiree Medical Coverage50 - Miscellaneous

Medical Plan
Single 2-Party Family Total
<65 65+ <65 65+ <65 65+
Anthem Select 3 1 2 1 1 2 10
Anthem Traditional 7 11 2 21 - 2 43
Blue Shield Access+ 5 2 5 5 2 - 19
Health Net SmartCare 1 - - - - - 1
Kaiser 21 94 45 68 8 6 242
Kaiser Summit - 8 - 2 - 1 11
UnitedHealthcare - 64 1 32 - - 97
UnitedHealthcare Edge - 2 - 1 - - 3
Western Health Advantage - - - 1 - - 1
PERS Gold 1 1 2 2 4 - 10
PERS Platinum 19 129 32 111 10 7 308
PORAC - 3 1 1 - 1 6
Total 57 315 90 245 25 19 751
% as of June 30, 2023 8% 42% 12% 33% 3% 2% 100%
% as of June 30, 2021 9% 41% 12% 32% 4% 2% 100%

50 Approximately 77% of retirees have coverage in a region 1 plan. The rest are in other state regions or out of state.

May 21, 2024 E- 14

DATA SUMMARY
Retiree Medical Coverage51 - Safety

Medical Plan
Single 2-Party Family Total
<65 65+ <65 65+ <65 65+
Anthem Select - - - - - - -
Anthem Traditional 1 - 1 7 3 2 14
Blue Shield Access+ 1 - 2 - 1 1 5
Health Net SmartCare - - - - - - -
Kaiser 7 12 11 21 12 1 64
Kaiser Summit - - - - - - 0
UnitedHealthcare - 11 - 6 1 - 18
UnitedHealthcare Edge - - - - - - 0
Western Health Advantage - - - - - - 0
PERS Gold - - - - - - 0
PERS Platinum 7 39 6 37 5 2 96
PORAC 12 4 15 19 29 3 82
Total 28 66 35 90 52 9 280
% as of June 30, 2023 10% 24% 13% 32% 19% 3% 100%
% as of June 30, 2021 9% 25% 16% 29% 19% 2% 100%

51 Approximately 70% of retirees have coverage in a Region 1 plan. The rest are in other state regions or out of state.

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 E- 15

DATA SUMMARY
Retirees Medical Coverage by Age – Miscellaneous

Age Single 2-Party Family Total
Under 50 - 1 - 1
50-54 2 3 4 9
55-59 12 19 9 40
60-64 43 67 12 122
65-69 63 68 11 142
70-74 73 66 5 144
75-79 76 65 3 144
80-84 59 22 - 81
85 & Over 44 24 - 68
Total 372 335 44 751
Average Age 74.5 71.2 64.0 72.4

May 21, 2024 E- 16

DATA SUMMARY
Retirees Medical Coverage by Age – Police

Age Single 2-Party Family Total
Under 50 3 1 6 10
50-54 - 1 7 8
55-59 3 1 6 10
60-64 9 6 9 24
65-69 3 13 5 21
70-74 10 6 - 16
75-79 3 7 - 10
80-84 3 4 - 7
85 & Over 4 3 - 7
Total 38 42 33 113
Average Age 68.1 70.5 57.5 65.9

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 E- 17

DATA SUMMARY
Retirees Medical Coverage by Age – Fire

Age Single 2-Party Family Total
Under 50 - - - -
50-54 - 1 7 8
55-59 6 10 11 27
60-64 7 15 6 28
65-69 3 14 4 21
70-74 5 11 - 16
75-79 7 12 - 19
80-84 17 9 - 26
85 & Over 11 11 - 22
Total 56 83 28 167
Average Age 76.7 71.7 59.0 71.2

May 21, 2024 E- 18

DATA SUMMARY
Retirees Medical Coverage by Age – Total

Age Single 2-Party Family Total
Under 50 3 2 6 11
50-54 2 5 18 25
55-59 21 30 26 7 7
60-64 59 88 27 174
65-69 69 95 20 184
70-74 88 83 5 176
75-79 86 84 3 173
80-84 79 35 - 114
85 & Over 59 38 - 97
Total 466 460 105 1,031
Average Age 74.3 71.2 60.6 71.5

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 E- 19

DATA SUMMARY
Actives by Age and Service – Miscellaneous

City Service
Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total
< 25 8 4 - - - - - 12
25-29 21 26 4 - - - - 51
30-34 18 49 37 1 - - - 105
35-39 15 21 30 16 3 - - 85
40-44 7 23 35 22 10 10 1 108
45-49 8 14 23 19 19 21 1 105
50-54 2 12 18 13 13 19 13 90
55-59 1 13 14 16 13 22 10 89
60-64 5 5 9 10 10 10 15 64
≥ 65 2 2 4 3 8 6 4 29
Total 87 169 174 100 76 88 44 738

May 21, 2024 E- 20

DATA SUMMARY
Actives by Age and Service – Police

City Service
Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total
< 25 - 1 - - - - - 1
25-29 1 8 1 - - - - 10
30-34 - 7 5 - - - - 12
35-39 1 1 6 2 2 - - 12
40-44 1 1 2 8 4 - - 16
45-49 - - 1 2 1 7 1 12
50-54 - - - 1 1 2 1 5
55-59 - - 1 - - - 1 2
60-64 - - 1 - - 1 - 2
≥ 65 - - - - - - - -
Total 3 18 17 13 8 10 3 72
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 E- 21

DATA SUMMARY
Actives by Age and Service – Fire

City Service
Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total
< 25 1 2 - - - - - 3
25-29 9 11 - - - - - 20
30-34 2 7 3 - - - - 12
35-39 2 1 4 5 1 - - 13
40-44 - - 1 4 6 1 - 12
45-49 - - 2 2 3 1 - 8
50-54 - - - 2 3 10 5 20
55-59 - - - - 1 1 1 3
60-64 - - - - - 1 - 1
≥ 65 - - - - - - - -
Total 14 21 10 13 14 14 6 92

May 21, 2024 E- 22

DATA SUMMARY
Actives by Age and Service – Total

City Service
Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total
< 25 9 7 - - - - - 16
25-29 31 45 5 - - - - 81
30-34 20 63 45 1 - - - 129
35-39 18 23 40 23 6 - - 110
40-44 8 24 38 34 20 11 1 136
45-49 8 14 26 23 23 29 2 125
50-54 2 12 18 16 17 31 19 115
55-59 1 13 15 16 14 23 12 94
60-64 5 5 10 10 10 12 15 67
≥ 65 2 2 4 3 8 6 4 29
Total 104 208 201 126 98 112 53 902
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

Item 28: Staff Report
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May 21, 2024 E- 23

ADDITIONAL ACTUARIAL ASSUMPTIONS

June 30, 2021 Valuation June 30, 2023 Valuation
 Retirement  CalPERS 2000-2019
Experience Study- Expected
retirement age for each tier
Misc Fire & Police
Tier 1 2.7%@55 3%@50
Exp. RetAge 60.7 56.4 & 54.0
Tier 2 2%@60 3%@55
Exp. RetAge 63.0 57.7 & 56.4
PEPRA

2.5%@67 2.7%@57
Exp. RetAge 62.4 57.1 & 56.7

 CalPERS 2000-2019
Experience Study - Expected
retirement age for each tier
Misc Fire & Police
Tier 1 2.7%@55 3%@50
Exp. RetAge 61.2 56.1 & 53.9
Tier 2 2%@60 3%@55
Exp. RetAge 63.1 57.7 & 57.2
PEPRA

2.5%@67 2.7%@57
Exp. RetAge 62.5 57.2 & 56.5

 Spousal
Coverage at
Retirement
 70% of covered retirees are
assumed to cover spouses
 Based on Plan experience
 Same
 Waived Retiree
Re-election
 0%  Same

May 21, 2024 E- 24

ADDITIONAL ACTUARIAL ASSUMPTIONS
June 30, 2021 Valuation June 30, 2023 Valuation
 Medical Trend Increase from Prior Year
Calendar
Year
Pre-
Medicare
Post-
Medicare
Other
Post-
Medicare
Kaiser
2019-20 n/a
2021 Actual Premiums
2022 Actual Premiums
2023 6.50% 5.65% 4.60%
2024 6.25% 5.45% 4.45%
2025 6.00% 5.25% 4.60%
2026 5.75% 5.05% 4.45%
2027 5.55% 4.90% 4.35%
2028 5.35% 4.75% 4.25%
2029 5.15% 4.60% 4.20%
2030 4.95% 4.45% 4.05%
2031-35 4.80% 4.35% 4.00%
2036-45 4.65% 4.25% 3.95%
2046-55 4.50% 4.20% 3.90%
2056-65 4.35% 4.15% 3.85%
2066-75 4.05% 3.95% 3.80%
2076+ 3.75% 3.75% 3.75%

Increase from Prior Year

Pre-
Medicare
Post-
Medicare
Other
Post-
Medicare
Year Kaiser
2021 n/a
2022 n/a
2023 Actual Premiums
2024 Actual Premiums
2025 8.50% 7. 50% 6.25%
2026 7.90% 6. 90% 5.65%
2027 7.35% 6. 50% 5.45%
2028 6.75% 6. 10% 5.25%
2029 6.20% 5. 70% 5.05%
2030 5.60% 5. 25% 4.85%
2031 5.05% 4. 85% 4.65%
2032-38 4.45% 4.45% 4.45%
2039-40 4.35% 4.35% 4.35%
2041 4.30% 4. 30% 4.30%
↓ ↓ ↓ ↓
2076+ 3.45% 3.45% 3.45%

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

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May 21, 2024 E- 25

ADDITIONAL ACTUARIAL ASSUMPTIONS
June 30, 2021 Valuation June 30, 2023 Valuation
 Medical Plan at
Retirement &
Retirees Attaining
age 65
 Miscellaneous: <65 65+
Anthem Traditional 10% 5%
Blue Shield Access+ 5% 0%
Kaiser 50% 30%
PERS Choice 30% 20%
PERSCare 5% 25%
UnitedHealthcare 0% 20%

 Safety: <65 65+
Anthem Traditional 10% 5%
Blue Shield Access+ 5% 0%
Kaiser 40% 25%
PERS Choice 0% 15%
PERSCare 10% 35%
PORAC 35% 10%
UnitedHealthcare 0% 10%

 Based on Plan experience
 Miscellaneous: <65 65+
Anthem Traditional 10% 5%
Blue Shield Access+ 5% 0%
Kaiser 45% 30%
PERS Gold 5% 0%
PERS Platinum 35% 45%
UnitedHealthcare 0% 20%

 Safety: <65 65+
Anthem Traditional 5% 5%
Blue Shield Access+ 5% 0%
Kaiser 30% 25%
PERS Gold 0% 0%
PERS Platinum 15% 45%
PORAC 45% 15%
UnitedHealthcare 0% 10%

 Based on Plan experience

May 21, 2024 E- 26

ADDITIONAL ACTUARIAL ASSUMPTIONS
June 30, 2021 Valuation June 30, 2023 Valuation
 Family Coverage
at Retirement
(for future
retirees)
 Misc: 15% until age 65
5% age 65-75
 Safety: 50% until age 65
5% age 65-80
 Based on Plan experience
 Same
 Spouse Age  Actives – Males 3 years older
than females
 Retirees – Males 3 years
older than females if spouse
birth date not available
 Same

 Surviving
Spouse
Participation
 100%  Same
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

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May 21, 2024 E- 27

ADDITIONAL ACTUARIAL ASSUMPTIONS
June 30, 2021 Valuation June 30, 2023 Valuation
 Medicare
Eligibility
 Actives and retirees hired
before 4/1/86:
• Miscellaneous – 80%
• Safety – 90%
 Actives and retirees hired on
or after 4/1/86: 100%
 Retirees before 65 with
unknown hire date: 90%
 Everyone eligible for
Medicare will elect Part B
coverage
 Same
 Future New
Participants
 None – Closed Group  Same
 Retirees Missing
Fund
 No retirees missing Fund
information.
 Same

May 21, 2024 E- 28

ADDITIONAL ACTUARIAL ASSUMPTIONS
June 30, 2021 Valuation June 30, 2023 Valuation
 Retirees Missing
Department
 Assumed to have the same
department as the prior
valuation
 Liability for retirees assumed
to be 75% GF allocated
proportionately across all
Departments
 Same
 Actuarial Models  Our valuation was performed using and relying on ProVal, an actuarial model leased from Wintech. Our use of ProVal is consistent with its intended purpose. We have reviewed and understand ProVal and its operation, sensitivities and
dependencies.
 Data Quality  Our valuation used census data provided by the City and CalPERS OPEB data extract. We reviewed the data for
reasonableness and resolved any questions with the City. We believe the resulting data can be relied on for all purposes of this valuation without limitation.

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

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May 21, 2024 E- 29

ADDITIONAL ACTUARIAL ASSUMPTIONS
June 30, 2021 Valuation June 30, 2023 Valuation
 Sample Medical
Claims Costs
2024
 Sample estimated monthly claims costs:

Region 1 – Non-Medicare Eligible
Kaiser PERS Platinum PORAC
Age M F M F M F
55 $1,094 $1,196 $1,197 $1,307 $1,083 $1,184
60 1,376 1,386 1,503 1,513 1,364 1,373
65 1,704 1,633 1,858 1,780 1,691 1,619
70 1,917 1,829 2,058 1,964 1,952 1,861
75 2,158 2,053 2,292 2,181 2,235 2,125
80 2,487 2,347 2,640 2,492 2,578 2,432
85 2,790 2,634 2,959 2,795 2,893 2,731
Region 1 – Medicare Eligible
Kaiser PERS Platinum PORAC
Age M F M F M F
65 n/a n/a $447 $428 $408 $391
70 n/a n/a 484 463 442 423
75 n/a n/a 516 495 471 452
80 n/a n/a 532 514 486 469
85 n/a n/a 526 512 480 468

May 21, 2024 E- 30

ADDITIONAL ACTUARIAL ASSUMPTIONS

This page intentionally blank

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Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

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May 21, 2024 E- 31

RESULTS BY FUND
Actuarial Obligations – June 30, 2023 – 6.25% Discount Rate (Amounts in 000’s)
FUND AAL Assets52 UAAL
 Airport $ 443 $ 250 $ 193
 CIP 4,957 2,797 2,160
 Elec53 31,933 18,019 13,914
 Gas5353 12,636 7,130 5,506
 GF 178,807 100,893 77,914
 ISF – Technology 6,254 3,529 2,725
 ISF – Vehicle 2,214 1,249 965
 ISF – Printing & Mailing 125 70 55
 ISF – Workers Comp 115 65 50
 PARKING 656 371 285
 Refuse 5,246 2,960 2,286
 Storm Drain 2,344 1,324 1,020
 Water5353 10,435 5,890 4,545
 WWC53 3,028 1,708 1,320
 WWT 17,379 9,806 7,573
 Total 276,572 156,061 120,511

52 Assets allocated in proportion to AAL.
53 AAL for UTL employees allocated to Elec, Gas, Water, and WWC in proportion to each Fund’s AAL

May 21, 2024 E- 32

RESULTS BY FUND
Actuarially Determined Contribution (ADC) – 6.25% Discount Rate (Amounts in 000’s)

FUND 2024/25 2025/26
 Airport $ 61 $ 63
 CIP 440 452
 Elec53 1,764 1,811
 Gas53 781 802
 GF 10,325 10,600
 ISF – Technology 442 453
 ISF – Vehicle 148 152
 ISF – Printing & Mailing 11 11
 ISF – Workers Comp 16 17
 PARKING 76 77
 Refuse 242 248
 Storm Drain 172 177
 Water53 616 631
 WWC53 100 103
 WWT 1,222 1,254
 Total 16,416 16,851
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

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May 21, 2024 E- 33

RESULTS BY GF DEPARTMENT
Actuarial Obligations – June 30, 2023 – 6.25% Discount Rate (Amounts in 000’s)
GF Department AAL Assets54 UAAL
 ASD $ 9,447 $ 5,331 $ 4,116
 ATT 2,674 1,509 1,166
 AUD 141 79 61
 CLK 713 402 311
 COU 1,257 709 548
 CSD 16,738 9,445 7,293
 DSD 5,734 3,236 2,498
 FIR 50,675 28,590 22,083
 HRD 2,727 1,539 1,188
 LIB 6,637 3,746 2,892
 MGR 2,772 1,564 1,208
 PLA 6,764 3,817 2,947
 POL 55,075 31,078 23,998
 PWD 17,453 9,848 7,605
 Total 178,807 100,893 77,914

54 Assets allocated in proportion to AAL.

May 21, 2024 E- 34

RESULTS BY GF DEPARTMENT
Actuarially Determined Contribution (ADC) – 6.25% Discount Rate (Amounts in 000’s)

GF Department 2024/25 2025/26
 ASD $ 584 $ 599
 ATT 157 162
 AUD 4 4
 CLK 36 37
 COU 69 71
 CSD 1,059 1,086
 DSD 478 491
 FIR 2,588 2,657
 HRD 157 161
 LIB 492 505
 MGR 186 191
 PLA 420 431
 POL 3,175 3,260
 PWD 920 945
 Total 10,325 10,600
Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

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May 21, 2024 E- 35

DEFINITIONS
Present Value of Benefits

May 21, 2024 E- 36

DEFINITIONS
 Actuarially
Determined
Contribution
(ADC)
 Contribution for the current period including:
• Normal Cost
• Administrative expenses
• Amortization of:
 Initial Unfunded AAL
 AAL for plan, assumption, and method changes
 Experience gains/losses (difference between expected and actual)  Contribution gains/losses (difference between ADC and actual)

Item 28
Attachment D - June 30,
2023 OPEB Actuarial
Valuation Report (CMR
2402-2673).pdf

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Attachment D, Exhibit 1
Fund Department/Fund Title Revenue Expense Comments

GENERAL FUND
General Fund Administrative Services Retiree Health Adjustment $ - $ 135,892 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
General Fund City Attorney Retiree Health Adjustment $ - $ 32,971 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
General Fund City Clerk Retiree Health Adjustment $ - $ (2,083) Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
General Fund City Council Retiree Health Adjustment $ - $ 3,361 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
General Fund City Manager Retiree Health Adjustment $ - $ 38,164 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
General Fund Community Services Retiree Health Adjustment $ - $ 192,818 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
General Fund Development Services Retiree Health Adjustment $ - $ 97,619 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
General Fund Fire Retiree Health Adjustment $ - $ 332,566 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
General Fund Human Resources Retiree Health Adjustment $ - $ 13,933 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
General Fund Library Retiree Health Adjustment $ - $ 51,003 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
General Fund Office of Emergency Services Retiree Health Adjustment $ - $ 11,424 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
General Fund Office of Transportation Retiree Health Adjustment $ - $ 17,277 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
General Fund
Planning & Community
Services Retiree Health Adjustment $ - $ 62,823
Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
General Fund Police Retiree Health Adjustment $ - $ 500,199 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
General Fund Public Works Retiree Health Adjustment $ - $ 162,690 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
GENERAL FUND SUBTOTAL $ - $ 1,650,657

SPECIAL REVENUE FUNDS
236 - University Avenue Parking Permits Administrative Services Retiree Health Adjustment $ - $ 536 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
236 - University Avenue Parking Permits Office of Transportation Retiree Health Adjustment $ - $ 144 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
236 - University Avenue Parking Permits Public Works Retiree Health Adjustment $ - $ 1,733 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
237 - California Avenue Parking Permits Administrative Services Retiree Health Adjustment $ - $ 244 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
City of Palo Alto
Central Other Post-Employment Benefits (OPEB) Adjustments in Various Funds Item 28
Attachment D Exhibit 1 - Central
OPEB Adjustments in Various
Funds.pdf

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237 - California Avenue Parking Permits Office of Transportation Retiree Health Adjustment $ - $ 144 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
237 - California Avenue Parking Permits Public Works Retiree Health Adjustment $ - $ 187 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
239 - Residential Parking Permit Programs Office of Transportation Retiree Health Adjustment $ - $ 1,000 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
SPECIAL REVENUE FUNDS SUBTOTAL $ - $ 3,987

CAPITAL FUNDS
471 - Capital Improvement Fund Administrative Services Retiree Health Adjustment $ - $ 2,039 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
471 - Capital Improvement Fund Community Services Retiree Health Adjustment $ - $ 1,699 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
471 - Capital Improvement Fund Office of Transportation Retiree Health Adjustment $ - $ 13,611 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
471 - Capital Improvement Fund Public Works Retiree Health Adjustment $ - $ 36,760 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
CAPITAL FUNDS SUBTOTAL $ - $ 54,109

ENTERPRISE FUNDS
513 - Electric Supply Fund Utilities $ - $ 19,110 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
514 - Gas Supply Fund Utilities $ - $ 5,030
Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
521 - Utilities Administration Fund Utilities $ - $ (3,364) Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
522 - Water Fund Utilities $ - $ 75,809
Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
523 - Electric Fund Utilities $ - $ 258,632
Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
524 - Gas Fund Utilities $ - $ 131,896
Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
525 - Refuse Fund Public Works $ - $ 47,695
Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
526 - Wastewater Treatment Fund Public Works $ - $ 295,490 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
527 - Wastewater Collection Fund Utilities $ - $ (74,921) Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
528 - Stormwater Management Fund Public Works $ - $ 36,272 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
530 - Airport Enterprise Fund Public Works $ - $ 9,345 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
533 - Fiber Optics Fund Utilities $ - $ (3,028)
Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
ENTERPRISE FUNDS SUBTOTAL $ - $ 797,965
Attachment D, Exhibit 1
Item 28
Attachment D Exhibit 1 - Central
OPEB Adjustments in Various
Funds.pdf

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INTERNAL SERVICE FUNDS
681 - Vehicle Replacement & Maintenance Fund Public Works Retiree Health Adjustment $ - $ 20,134 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
682 - Technology Fund Information Technology Retiree Health Adjustment $ - $ 71,067 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
683 - Printing & Mailing Services Fund Administrative Services Retiree Health Adjustment $ - $ 5,296 Adjustments to align OPEB costs with the June 30, 2023 Valuation (CMR 2402-2673)
687 - General Benefits & Insurance Fund
687 - General Benefits &
Insurance Fund Retiree Health Adjustment $ - $ (254,500) Transfer for Implied Subsidy 694 - Retiree Health Benefits Fund - AB702
Retiree Health Benefits Fund -
AB702 Retiree Health Adjustment $ 2,603,214 $ - OPEB Funding from City Funds 694 - Retiree Health Benefits Fund - AB702
Retiree Health Benefits Fund -
AB702 Retiree Health Adjustment $ (254,500) $ - Transfer for Implied Subsidy 694 - Retiree Health Benefits Fund - AB702
Retiree Health Benefits Fund -
AB702 Retiree Health Adjustment $ - $ 2,348,714 OPEB costs for increased Actuarial Determined Contribution (ADC) INTERNAL SERVICE FUNDS SUBTOTAL $ 2,348,714 $ 2,190,711 TOTAL ADJUSTMENT $ 2,348,714 $ 4,697,429
Attachment D, Exhibit 1
Item 28
Attachment D Exhibit 1 - Central
OPEB Adjustments in Various
Funds.pdf

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Item 28
Attachment E - PTC Letter
of the 2025-2029 Capital
Improvement Plan to the
Citys Comprehensive
Plan.pdf

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Packet Pg. 708 of 946

City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Utilities
Meeting Date: June 17, 2024
Staff Report: 2404-2842
TITLE
PUBLIC HEARING & PROPOSITION 218 HEARING: Finance Committee Recommends Adoption of Six Resolutions: 1) Approving the Fiscal Year 2025 Wastewater Collection Utility Financial Plan, Including Approval of a Short-Term Loan From the Fiber Optics Fund Reserve to the Wastewater Collection Fund Operations Reserve for Fiscal Year 2024, and Amending Wastewater Collection Rate Schedules S-1, S-2, S-6 and S-7; 2) Approving the Fiscal Year 2025 Water Utility Financial Plan, and Amending Water Rate Schedules W-1, W-2, W-3, W-4, and W-7; 3) Approving the Fiscal Year 2025 Gas Utility Financial Plan, and Amending Gas Rate Schedules G-1, G-2, G-3 and G-10; 4) Approving the Fiscal Year 2025 Electric Utility Financial Plan and Accepting the 2024 City of Palo Alto Electric Cost of Service and Rate Study, and Amending Electric Rate Schedules E-1, E-2, E-4, E-4 TOU, E-7, E-7 TOU, E-14, E-EEC-1, E-NSE- 1, E-2-G, E-4-G and E-7-G; 5) Amending Utility Rate Schedules EDF-1 and EDF-2 to Increase Dark Fiber Rates 2.6 Percent; 6) Amending Utility Rate Schedule D-1 Increasing the Storm Water Management Fee by 2.6 Percent per Month per Equivalent Residential Unit for FY 2025; CEQA Status: Not a project under CEQA Guidelines Sections 15378(b)(4) and (5) and Exempt Under Section 15273(a)

RECOMMENDATION
Note: Resolutions are included in the packet as Attachments A – F, Attachment G reflects the Table of URLs for the Exhibits to Attachments A – F.

The Finance Committee, the Utilities Advisory Commission and staff recommend that the City Council adopt the following;

1. For the Wastewater Collection Utility, a Resolution (Attachment A):
a. Approving the Wastewater Collection Utility Financial Plan for Fiscal Year (FY) 2025, including approval of a short-term loan from the Fiber Optics Fund Reserve to the Wastewater Collection Fund Operations Reserve not to exceed $3,000,000 for FY 2024; Amend the Fiscal Year 2024 Budget Appropriation Ordinance: In the Wastewater Collection Fund:

Item 29
Item 29 Staff Report

Item 29: Staff Report
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i. Increase the Transfer In from the Fiber Optics Fund by $3.0 million ii. Increase the Ending Fund Balance by $3.0 million; and b. Amending the following Wastewater Collection Utility Rate Schedules to reflect increases effective July 1, 2024 (FY 2025):
i. S-1 (Residential Wastewater Collection and Disposal), ii. S-2 (Commercial Wastewater Collection and Disposal), iii. S-6 (Restaurant Wastewater Collection and Disposal), and iv. S-7 (Commercial Wastewater Collection and Disposal – Industrial Discharger);

2. For the Water Utility, a Resolution (Attachment B):
a. Approving the FY 2025 Water Utility Financial Plan; and b. Amending the following Water Rate Schedules to reflect increases effective July 1, 2024 (FY 2025):
i. W-1 (General Residential Water service),
ii. W-2 (Water Service from Fire Hydrants),
iii. W- 3 (Fire Service Connections),
iv. W-4 (Residential Master-Metered and General Non- Residential Water Service), and
v. W-7 (Non-Residential Irrigation Water Service);

3. For the Gas Utility, a Resolution (Attachment C):
a. Approving the Gas Utility Financial Plan FY 2025, which includes amending the Gas Utility Reserve Management Practices; and
b. Amending Gas Utility Rate Schedules FY 2025 to reflect increases effective July 1, 2024 (FY 2025):
i. G-1 Residential Gas Service,
ii. G-2 Residential Master-Metered and Commercial Gas Service, iii. G-3 Large Commercial Gas Service, and G-10 Compressed Natural Gas Service); and
c. Transferring up to 14.5% of gas utility gross revenues received during FY 2023 to the General Fund in FY 2025.

4. For the Electric Utility, a Resolution (Attachment D):
a. Accepting the 2024 City of Palo Alto Electric Cost of Service and Rate Study; b. Approving the Electric Utility Financial Plan FY 2025, which includes the following actions:
i. Amending the Electric Utility Reserves Management Practices, to direct staff to transfer to the CIP reserve, at the end of each fiscal year, any budgeted capital investment that remains unspent, uncommitted, and which is not proposed for reappropriation to the following fiscal year and to clarify how the Cap and Trade Program Reserve is adjusted each year. ii. Approving the following transfers at the end of FY 2024:

1. Up to $20 million from the Electric Special Projects Reserve to the Item 29
Item 29 Staff Report

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Supply Operations Reserve;

2. Up to $17 million from the Supply Operations Reserve to the Hydroelectric Stabilization Reserve;

3. Up to $58 million from the Supply Operations Reserve to the Distribution Operations Reserve; and
iii. Approving the following transfers in FY 2025:

1. Up to $26 million from the Distribution Operations Reserve to the Supply Operations Reserve;

2. Up to $30 million from the Supply Operations Reserve to the Electric Special Projects Reserve; and

3. Up to $5 million from the Distribution Operations Reserve to the CIP Reserve;
c. Amending the following Electric Utility Rate Schedules effective July 1, 2024 (FY 2025):
i. E-1 (Residential Electric Service), E-2 (Small Non-Residential Electric Service), E-4 (Medium Non-Residential Electric Service), E-4 TOU (Medium Non-Residential Time of Use Electric Service), E-7 (Large Non- Residential Electric Service), E-7 TOU (Large Non-Residential Time of Use Electric Service) and E-14 (Street Lights), each by varying percentages depending on rate schedule and consumption with an overall revenue increase of 0.5% effective July 1, 2024;
ii. Decreasing the Net Surplus Electricity Compensation (E-NSE-1) rate to reflect 2023 avoided cost, effective July 1, 2024; and
iii. Decreasing the Export Electricity Compensation (E-EEC-1) rate to reflect current projections of FY 2025 avoided cost, effective July 1, 2024; iv. Updating the Residential Master-Metered and Small Non-Residential Green Power Electric Service (E-2-G), the Medium Non-Residential Green Power Electric Service (E-4-G), and the Large Non-Residential Green Power Electric Service (E 7 G) rate schedules to reflect modified distribution and commodity components, effective July 1, 2024.

5. A Resolution (Attachment E) Amend the Fiscal Year 2024 Budget Appropriation Ordinance: In the Fiber Optics Fund:
i. Increase the Transfer Out to the Wastewater Collection Fund by 3.0 million ii. Decrease the Ending Fund Balance by $3.0 million; and amending Fiber Optic Utility Rate Schedules EDF-1 and EDF-2 to increase Dark Fiber Rates

2.6 percent effective July 1, 2024, consistent with the applicable Consumer Price Index;

6. A Resolution (Attachment F) amending Storm Water Management Fee Rate Schedule D- 1 to increase the Storm Water Management Fee by 2.6 percent effective July 1, 2024, consistent with the applicable Consumer Price Index.

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EXECUTIVE SUMMARY
The rate changes described in this report will allow Palo Alto to invest in utility infrastructure, gradually increase reserves to guideline levels, and to support community goals. As utility infrastructure ages, investment is needed to maintain the reliability of the water, wastewater, electric and gas utilities. These rate increases will support the maintenance and replacement of infrastructure including rebuilding Palo Alto’s wastewater treatment plant (Regional Water Quality Control Plant). Investment in modernizing the electric grid will allow the City to achieve the Council’s Sustainability and Climate Action goals as well as to increase reliability of utility service to residents and businesses in Palo Alto. During the pandemic, the City of Palo Alto held rate increases to a minimum in order to limit the financial impacts to Palo Alto residents and businesses. However, holding down rates with rising commodity prices and drought means that utility reserves are now low; the reserves need to be replenished to provide fiscal responsibility for when unexpected events occur and more stable rate management overall.

From January 2024 through April 2024, the Utilities Advisory Commission (UAC) and Finance Committee reviewed preliminary and proposed rate changes recommended by staff for Fiscal Year 2025. This report summarizes the meetings, and incorporates UAC and Finance Committee recommendations into the staff recommendations for Council adoption. This comprehensive utility rates report includes separate sections for each of the Utilities: wastewater collection, water, gas, electric, dark fiber, and storm drainage and surface water. Estimates for retail revenue impacts are included in the FY 2025 budget assumptions. This report outlines the recommended actions and transmits the draft resolutions requested for City Council approval and adoption.

Approval of this item would result in implementation of the finalized rates for FY 2025, beginning July 1, 2024.

The expected average residential utility bill changes are below, with the expected overall average utility bill for residential service to increase 9% in FY 2025. •15% increase for Wastewater Collection,
•9.5% increase for Water,
•12.5% increase for Gas,
•9% for Electric,
•2.6% increase for Dark Fiber rate schedules EDF-1 and EDF-2 and •2.6% increase for the Storm Water Management Fee.

In addition to the financial plans, the City engaged the services of a consultant to prepare a cost of service analysis (COSA) for the City’s electric rates to ensure that electric rates continue to represent the Utility’s cost to serve customers. The COSA, completed in April 2024, showed the need for different changes by customer class ranging from a 6% decrease for small non- residential customers (E-2) to a 2% increase for the residential class as a whole. However, recommended changes to the tier structure and the addition of a fixed charge result in a range of changes for residential customers depending on usage, with the median residential electric customer seeing a 9% increase. With the proposed rate increases, Palo Alto residential electric bills are projected to be approximately 50% lower than neighboring communities served by Item 29
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PG&E.

BACKGROUND
Wastewater Collection
Utilities staff presented to the Finance Committee on April 23, 2024 and to the UAC on March 6, 2024 a recommendation that Council approve the Wastewater Collection Utility Financial Plan FY 2025, including approval of a short-term loan from the Fiber Optics Fund Reserve to the Wastewater Collection Fund Operations Reserve not to exceed $3,000,000 for FY 2024 if short- term cashflow becomes negative. In addition, staff recommended increasing wastewater collection rates 15% by amending rate schedules S-1 (Residential Wastewater Collection and Disposal), S-2 (Commercial Wastewater Collection and Disposal), S-6 (Restaurant Wastewater Collection and Disposal) and S-7 (Commercial Wastewater Collection and Disposal – Industrial Discharger). See Staff Report 2402-26031 for more information.

The Finance Committee and UAC unanimously recommended approval of this proposal.

Water
Utilities staff presented to the Finance Committee on April 23, 2024 and the UAC on March 6, 2024 a recommendation that Council approve the Water Utility Financial Plan FY 2025. In Staff Report 2402-2604, 2 staff originally recommended a 13% water distribution rate increase and reflected a 6.5% water commodity rate increase based on preliminary estimates from the SFPUC.

However, on April 12, 2024, SFPUC provided its rate notice to Palo Alto with an 8.8% water commodity rate increase. To mitigate the overall bill impact to customers, the Finance Committee voted unanimously on April 23 rd to lower the distribution rate increase to maintain an overall expected bill impact of 9.5% through the use of additional rate stabilization reserve funds in FY 2025, bringing the Operations and CIP Reserves below the minimum guideline ranges during the forecast period. Staff updated the Resolution (Attachment B) and all Exhibits to Attachment B to reflect the Finance Committee’s direction: a 10% water distribution rate increase in combination with the 8.8% water commodity rate increase resulting in an overall 9.5% rate increase.

Staff recommends increasing water distribution rates 10% by amending rate schedules W-1 (General Residential Water service), W-2 (Water Service from Fire Hydrants), W-3 (Fire Service Connections), W-4 (Residential Master- Metered and General Non-Residential Water Service), and W-7 (Non-Residential Irrigation Water Service). The SFPUC is increasing its wholesale water rates by 8.8% due to the drought and related water-purchase cutbacks, resulting in an overall water rate increase for City customers of about 9.5%.
1 Staff Report 2402-2603 (April 23, 2024 Finance Committee); https://cityofpaloalto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyId=90274 720-d4f9-47c2-964a-5c722c99d7d8
2 Staff Report 2402-2604 (April 23, 2024 Finance Committee); https://cityofpaloalto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyId=29e7b 9c3-6b38-4c11-8032-8f921445fdac
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On April 29, Staff mailed a Prop 218 notice 3 to all utility customers, outlining proposed adjustments to the water and wastewater rates. Due to the timing of the Finance Committee meeting on April 23, 2024, which occurred after the deadline for finalizing the Prop 218 notice, the notice specified a 13% increase in distribution rates for water, alongside an 8.8% increase in water commodity rates. Consistent with the Finance Committee’s direction, staff lowered the proposed water distribution rate increase from 13% to 10% in the FY 2025 Water Utility Financial Plan and related Water Rate Schedules. Consequently, the staff proposal for the water distribution rates recommended for Council approval in this report is lower than indicated in the Prop 218 notice.

Gas
Utilities staff presented to the Finance Committee on April 23, 2024 and UAC on March 6, 2024 a recommendation that Council Adopt a Resolution approving the FY 2025 Gas Utility Financial Plan, which includes amending the Gas Utility Reserve Management Practices. At that time, staff’s preliminary recommendation was to increase gas rates overall by 9% (a 15% distribution rate increase). The Finance Committee unanimously recommended approval of this proposal (see Staff Report 2402-26054 for more information).

However, based upon a discussion of the City’s budget on May 8, 2024, the Finance Committee referred several items to the Council for discussion, including changing the Gas General Fund Transfer from 11.9% to 14.5% of FY 2023 gross revenue transferred in FY 2025, and 18% of FY 2024 gross revenue transferred in FY 2026. Staff updated its recommendation consistent with the Finance Committee’s May 8, 2024 referral to the Council. Attachment C and associated exhibits reflect this updated recommendation.

Staff recommends increasing gas rates overall by 12.5% (this equates to a 20.9% distribution rate increase and assumes gas supply-related costs remain unchanged) by amending rate schedules G-1 (Residential Gas Service), G-2 (Residential Master- Metered and Commercial Gas Service), G- 3 (Large Commercial Gas Service), G-10 (Compressed Natural Gas Service).

Electric
Utilities staff presented to the UAC on March 6, 2024 and the Finance Committee on April 23, 2024 a recommendation that Council Adopt a Resolution (Attachment D):

1. Accepting the 2024 City of Palo Alto Electric Cost of Service and Rate Study

2. Approving the FY 2025 Electric Financial Plan, which includes the following actions:
a. Amending the Electric Utility Reserves Management Practices, to direct staff to transfer to the CIP reserve, at the end of each fiscal year, any budgeted capital investment that remains unspent, uncommitted, and which is not proposed for 3 Prop 218 Notice; https://www.cityofpaloalto.org/files/assets/public/v/1/utilities/rates-schedules-for- utilities/prop-218-notice-FY 2025-final.pdf
4 Staff Report 2402-2605 (April 23, 2024 Finance Committee); https://cityofpaloalto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyId=d5e65 956-71ef-419d-b758-2a841ff14bef
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reappropriation to the following fiscal year and to clarify how the Cap and Trade Program Reserve is adjusted each year.
b. Approving the following transfers at the end of FY 2024:
i. Up to $20 million from the Electric Special Projects Reserve to the Supply Operations Reserve;
ii. Up to $17 million from the Supply Operations Reserve to the Hydroelectric Stabilization Reserve;
iii. Up to $58 million from the Supply Operations Reserve to the Distribution Operations Reserve; and
c. Approving the following transfers in FY 2025:
i. Up to $26 million from the Distribution Operations Reserve to the Supply Operations Reserve;
ii. Up to $30 million from the Supply Operations Reserve to the Electric Special Projects Reserve; and
iii. Up to $5 million from the Distribution Operations Reserve to the CIP Reserve;

3. Amending the following rate schedules effective July 1, 2024 (FY 2025):
a. Changing retail electric rates E-1 (Residential Electric Service), E-2 (Small Non- Residential Electric Service), E-4 (Medium Non-Residential Electric Service), E-4 TOU (Medium Non-Residential Time of Use Electric Service), E-7 (Large Non- Residential Electric Service), and E-7 TOU (Large Non-Residential Time of Use Electric Service) 5 by varying percentages depending on rate schedule and consumption with an overall revenue increase of 0.5% effective July 1, 2024; b. Decreasing the Net Surplus Electricity Compensation (E-NSE-1) rate to reflect 2023 avoided cost, effective July 1, 2024; and
c. Decreasing the Export Electricity Compensation (E-EEC-1) rate to reflect current projections of FY 2025 avoided cost, effective July 1, 2024; d. Updating the Residential Master-Metered and Small Non-Residential Green Power Electric Service (E-2-G), the Medium Non-Residential Green Power Electric Service (E-4-G), and the Large Non-Residential Green Power Electric Service (E 7 G) rate schedules to reflect modified distribution and commodity components, effective July 1, 2024.

See Staff Report 2401-24976 for more information.

The Finance Committee unanimously recommended approval of this proposal. 5 UAC and Finance Committee did not review E-14 (Street Lights) rate as the cost of service analysis on this rate schedule was not yet complete at the time of those meetings 6 Staff Report 2401-2497;
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Dark Fiber
Since 2007, the EDF-1 and EDF-2 rates for Dark Fiber customers have increased annually by the annual December change in the Consumer Price Index for All Urban Consumers (CPI-U) in the San Francisco area, as stated in their dark fiber license agreements. Based on prior Utilities Advisory Commission and City Council direction, these rate changes are routinely included as part of the Budget adoption process rather than in a separate staff report, however this report ensures the CPI increase is published in the City’s adopted rate schedules. This year’s change in CPI-U was 2.6 percent, as reported by the Bureau of Labor Statistics.

Storm Drain
On April 23, 2024, Public Works staff presented the Finance Committee with a recommendation that the City Council adopt a Resolution (Attachment F) amending Utility Rate Schedule D-1 (Storm and Surface Water Drainage) to implement a 2.6 percent rate increase consistent with the applicable Consumer Price Index, increasing the monthly charge per Equivalent Residential Unit by $0.44, from $16.76 to $17.20. See Staff Report 2402-26147 for more information.

The Finance Committee unanimously recommended approval of this proposal.

ANALYSIS
In January 2024 and February 2024, respectively, the UAC and Finance Committee received preliminary projections of rate increase needs for FY 2025. Based on their feedback and updated financial information, staff brought to the UAC on March 6, 2024 and the Finance Committee on April 23, 2024, recommendations for utility financial plans, transfer requests, and rate changes.

The Finance Committee voted to unanimously approve each of staff’s recommendations with the exception of the Water Utility rate proposal, where the Committee recommended a lower rate increase. Specifically, the Finance Committee recommended to increase the use of reserve funds in FY 2025 to limit the overall system average water rate increase to 9.5% while reducing reserve funds available in FY 2026 and future years.

In the May 8, 2024 budget meeting, the Finance Committee referred several items to the Council for discussion including changing the Gas General Fund Transfer from 11.9% to 14.5% of FY 2023 gross revenue transferred in FY 2025, and 18% of FY 2024 gross revenue transferred in FY 2026.

An 11.9% Gas General Fund Transfer for FY 2025 is $8.960 million and a 14.5% Gas General Fund Transfer for FY 2025 is $10.917 million. A 14.5% General Fund Transfer will result in a 12.5% increase to overall gas rates in FY 2025 assuming gas supply-related costs remain unchanged, and staff will decrease the size of Gas Main Replacement 25 by $0.735 million to limit the rate impacts to customers. This report and all attachments reflect the Finance Committee’s May 8, 2024 referral. On May 13, 2024 the Council discussed this item at a Study Session and Council members 7 Staff Report 2402-2614;
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discussed the transfer but did not reach consensus on the amount.

This report outlines the actions recommended, transmits the resolutions from these reviews, and requests City Council approval and adoption, as summarized below:

Proposed Rate Changes and Financial Plans
Wastewater Collection Proposal
The FY 2025 Wastewater Collection Utility Financial Plan includes projections of the utility’s costs and revenues through FY 2029. The Financial Plan anticipates costs will rise over the forecast horizon due to increasing treatment costs related to capital improvements and operational costs at the Regional Water Quality Control Plant (RWQCP), as well as increasing collection system operational and Capital Improvement Program (CIP) costs.

In 2023, the Council approved the first in a series of wastewater collection rate increases which incorporated expected costs for the City to accelerate its rate of sewer main replacements from 1 mile to 2.5 miles per year by FY 2026 (implemented as a major sewer replacement project of 5 miles every other year). The accelerated rate of main replacement was calculated to replace all aging sewer mains within 8 years beyond their 100-year life expectancy. Additionally, in FY 2023 the Wastewater Utility accelerated by a year the most expensive sewer main replacement that the utility has ever completed (Staff Report 2301-08081, May 8, 2023 approving contract for Sanitary Sewer Replacement Project 31, WC-19001 for $8.36 million). However, in FY 2023, costs were higher than forecasted and revenues were lower than forecasted and the Operations Reserve ended the year with a negative balance of $0.7 million.

In an effort to increase the currently low reserve levels, staff recommends a 15% rate increase in FY 2025, which is equivalent to $7.29 per month per residential customer. This proposal would include proceeding with a reduced-size main replacement in FY 2026 of 1.25 miles instead of 5 miles due to the low reserve and revenue levels. This would allow the highest priority mains to be replaced while allowing the reserves to gradually replenish before the next major project. The 5-mile sewer main replacement every other year would resume with construction scheduled in FY 2028. With this schedule of main replacement, the last remaining sewer main would be 110 years old at the time it is replaced.

Given the low reserves, and the projected levels of revenue and expenses, there is a risk that the short-term need for cash will exceed available cash in FY 2024 and/or FY 2025. Both the staff recommendation and the alternative assume a potential short- term loan from the Fiber Optics Fund Reserve to the Wastewater Collection Fund Operations Reserve not to exceed $3,000,000 for FY 2024.

During the April 23, 2024 Finance Committee meeting, Committee members had questions about how certain the Valley Water grant funding is and staff responded that there will be a staff report to Council soon and that the funding will be available to Palo Alto, but the total amount is Item 29
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uncertain.8 A Finance Committee member asked whether the loan from the Fiber optic utility is a loan or a line of credit and staff responded that it could be structured either way. After deliberating the proposal, the Finance Committee voted unanimously in favor of the 15% rate increase proposal put forth by staff and in favor of the one-time loan from the Fiber Optics Fund Reserve to the Wastewater Collection Fund Operations Reserve not to exceed $3,000,000 for FY 2024.

Water Proposal
Overall costs in the Water Utility are projected to rise on average by about 6% per year from Fiscal Year (FY) 2024 to 2029. Operations cost projections rise on average by about 4% annually from FY 2024 to 2029, excluding one-time transfers and debt service. Debt service is expected to decline by 4.5% during this time because one bond is to be retired in 2026. SFPUC’s FY 2024 wholesale water rate is $5.21 per CCF. On May 14, 2024, SFPUC held a public hearing and adopted the FY 2025 Wholesale Water Rate of $5.67 per CCF.

Overall, this Water Financial Plan uses reserve funding (from the Operations Reserve, Rate Stabilization Reserve and CIP Reserve) together with rate increases to manage the decreased sales revenue and increasing costs from FY 2024 through FY 2029. While these rate increases can be perceived as decreasing the benefit of conservation, bills for customers who conserve will be lower in the future than they would have been without conservation.

By approving the attached resolution, the Council would approve the proposed FY 2025 Water Utility Financial Plan, which includes an increase in distribution rates of 10% for rate W-1 (General Residential Water service), W-2 (Water Service from Fire Hydrants), W-3 (Fire Service Connections), W-4 (Residential Master-Metered and General Non-Residential Water Service), and W-7 (Non-Residential Irrigation Water Service). The FY 2025 Water Utility Financial Plan also increases the Commodity rate for each CCF of water sold to the SFPUC Wholesale Water Rate of $5.67. By approving the attached resolution (Attachment B), Council would also authorize the extension of Palo Alto’s pass-through provision for the SFPUC wholesale rate increase for an additional five years, effective July 1, 2024.

During the April 23, 2024 Finance Committee meeting, Committee members asked about Palo Alto’s residential rates being higher relative to neighboring agencies and non-residential rates being closer to the average of neighboring utilities. Staff explained that the process used to set the water rates is a detailed cost of service study using a standard method and outside expert consultant. One Committee member suggested comparing Palo Alto’s water rates to neighboring utilities who also use 100% SFPUC for their potable water supply. After deliberating the proposal, the three members of the Finance Committee voted unanimously in favor of the staff proposal 8 Staff Report 2404-2877, June 3, 2024 requests approval from Council for a cost-sharing agreement with Valley water for Guiding Principle 5 Program funding for future projects at the Palo Alto Regional Water Quality Control Plant:
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as modified to reflect SFPUC’s April rate increase notice and by increasing the use of water reserves to limit the overall system average water rate increase to 9.5% in FY 2025 while reducing reserve funds available in FY 2026 and future years.

Gas Proposal
The FY 2025 Gas Utility Financial Plan includes projections of the utility’s costs and revenues for FY 2025 through FY 2029. Staff recommends increasing the distribution component of the gas rates by 20.9% in FY 2025 to bring revenue up to a level closer to recovering the costs of operations and prevent further depletion of reserves. This distribution rate increase is projected to increase overall customer bills by about 12.5% in FY 2025, assuming gas supply-related costs remain unchanged. In FY 2021 and FY 2022, the Gas Utility maintained minimal rate increases, leading to revenues struggling to match the rising expenses, resulting in a significant depletion of reserves.

Although revenues exceeded costs in FY 2023, some costs associated with FY 2023 were paid in FY 2024. Specifically, carbon offset purchases from FY 2023 were made in FY 2024, and the transfer of prior years’ Cap and Trade auction sales revenue from the Operations Reserve to the Cap and Trade reserve, which is a cost item, also occurred in FY 2024. Additionally, FY 2024 costs reflect the Council’s adopted revised natural gas purchasing strategy for the 2023 – 2024 winter months to include commodity price insurance against very high market prices. A longer-term strategy for mitigating against potential future gas price spikes will be presented to Council for consideration prior to next winter.

Consequently, the Operations Reserve is projected to drop below the risk assessment level by the end of FY 2024. Overall distribution costs are expected to increase by 4% from FY 2024 to FY 2025 and by 5% on average annually from FY 2025 through FY 2029. This distribution cost increase is due to projected increases in operations costs as well as capital costs related to the safety and maintenance of gas pipelines in Palo Alto, as well as preparation for electrification- related costs. In addition, increased costs from prior years reduced reserve levels and rates need to be increased to bring reserves gradually back to within guideline ranges.

As part of the annual budget process, Council also determines the amount of the General Fund transfer for the Gas Utility in FY 2025. Each year, in accord with the voter-approved changes codified in PAMC 2.28.185, the City Council may transfer from the gas utility to the General Fund an amount up to 18% of the gross revenues of the gas utility, though Council may choose to transfer a lesser amount. The Finance Committee and staff recommends transferring 14.5% of FY 2023 gas utility gross revenue to the general fund for FY 2025, and 18% of gas utility gross revenue in FY 2026 and subsequent years. Alternatively, in alignment with PAMC 2.28.185, Staff also provided two other alternatives for FY 2025: transfer 11.9%, or $8.96 million, or transfer up to 18%, or $13.55 million.

The proposed FY 2025 Gas Utility Financial Plan includes an increase in distribution rates effective July 1, 2024 and will result in a 12.5 percent increase to the total system average gas rate, Item 29
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assuming supply rates remain unchanged. This will be done by amending rate schedules G-1 (Residential Gas Service), G-2 (Residential Master-Metered and Commercial Gas Service), G-3 (Large Commercial Gas Service), and G-10 (Compressed Natural Gas Service). Additional 5 to 6 percent increases per year to the total system average gas rate are projected over the next four years. See Attachment C and its exhibits for more information.

Electric Proposal
The FY 2025 Electric Utility Financial Plan includes projections of the utility’s costs and revenues through FY 2029. Rate changes are recommended that vary significantly by customer class but that in aggregate result in little change (around a 0.5%increase) to total electric utility revenue in FY 2025. To ensure that electric rates continue to represent the Utility’s cost to serve customers, the City engaged the services of a consultant to prepare a cost of service analysis (COSA), which was completed in March 2024 (Attachment D, Exhibit 1.1) The COSA showed the need for different changes by customer class ranging from a 6% decrease for small non-residential customers (E-2) to a 2% increase for the residential class as a whole. However, recommended changes to the tier structure and the addition of a fixed charge result in a range of changes for residential customers depending on usage, with the median residential customer seeing a 9% increase.

Table 1: Revenue Allocation by Customer Class in FY2025 9 Palo Alto residential electric bills are approximately 50% lower than neighboring communities served by PG&E.

As of the drafting of this report, precipitation for the 2023/2024 water year was still below average. However, reservoir conditions are good as a result of last year’s rains, so staff is forecasting hydroelectric generation for FY 2025 and FY 2026 that is slightly higher than the baseline level assumed in its long-term projections. High one-time energy supply cost savings and surplus energy sales for FY 2024 are projected related to higher late summer 2023 hydroelectric generation resulting from the 2022/2023 winter rains. Other short term revenues include higher than average sales revenue for resource adequacy and renewable energy credits (RECs) in FY 2024 through FY 2026 due to favorable market conditions. Some of these revenues are being 9 This differs slightly from the 0.5% increase stated above, due to a difference in how revenues are forecast in the long-range cost of service model and staff’s annual financial modeling. The net revenue requirement under both models is the same: $164.5 million.

Projected Revenues
under Current Rates
Net Revenue
Requirement
Projected Surplus/
(Deficiency) in Revenue
Based on Current Rates
Revenue Increase/
(Decrease)
Needed
Residential E-1 27,309,759$ 27,852,514$ (542,755)$ 2.0% Small Commercial E-2 11,784,676$ 11,067,556$ 717,121$ -6.1% Medium Commercial E-4 67,707,023$ 65,186,601$ 2,520,422$ -3.7% Large Commercial E-7 59,295,683$ 58,473,708$ 821,975$ -1.4% Street and Traffic Lighting 2,224,184$ 2,006,759$ 217,425$ -9.8% TOTAL 168,321,326$ 164,587,138$ 3,734,187$ -2.2% Item 29
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used to replenish the hydroelectric stabilization reserve, reducing the chance that the City would need to activate the hydroelectric rate adjuster in the next few years, even if there is less snow and rain.

These one-time revenues are offset by significant capital investment costs associated with grid modernization ($50 million in FY 2024 and FY 2025), a rebuild of the Hanover substation ($15 million in FY 2024), and a new dark fiber backbone for the electric utility that will require some contribution from the electric utility ($13 million in FY 2026). Current plans anticipate offsetting these capital investments by issuing municipal bonds. However, reserves will need to absorb some of the costs in FY 2024 until the first bonds can be issued in FY 2025. This is leading to large reserve transfers in FY 2024 and FY 2025 to manage this short-term cash flow issue.

Total costs for the Electric Utility are projected to increase steadily through the forecast period.

The largest contributors to these cost increases are increasing transmission costs, reduced sales revenue from surplus RECs and resource adequacy rights, and increasing debt service associated with grid modernization. The financial plan projects the need for 5% per year rate increases through the forecast period. However, the electricity consumption projections in this report are conservative and increased load from electrification and any new large customer loads could reduce these projections. On the other hand, if the costs for grid modernization or other capital investment end up being higher than forecasted, as often occurs, those costs could offset the benefit of new customer loads.

Dark Fiber
Since 2007, the EDF-1 and EDF-2 rates for Dark Fiber customers have increased annually by the annual December change in the Consumer Price Index for All Urban Consumers (CPI-U) in the San Francisco area, as stated in their dark fiber license agreements. Based on prior Utilities Advisory Commission and City Council direction, these rate changes are routinely included as part of the Budget adoption process rather than in a separate staff report. This year’s change in CPI-U was

2.6 percent, as reported by the Bureau of Labor Statistics. The City has five customers remaining on the EDF-1 rate schedule. All other dark fiber customers are on the EDF-3 rate schedule.

Storm Water and Surface Water Drainage
On April 11, 2017, a majority of Palo Alto property owners approved a ballot measure approving a monthly Storm Water Management Fee. This fee funds thirteen storm drainage capital improvement projects listed in the ballot measure, enhanced maintenance of the storm drainage system, and a variety of stormwater quality protection programs. The approved ballot measure allows for an annual adjustment based on the Consumer Price Index (CPI) or six percent, whichever is less. The Storm Water and Surface Drainage Rate will increase 2.6 percent, increasing the monthly charge per Equivalent Residential Unit by $0.44, $16.76 to $17.20 for Fiscal Year 2025, effective July 1, 2024, to reflect the annual CPI change. See Staff Report 2402- 261410 for more information.
10 Staff Report 2402-2614;
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Timeline
Water and Wastewater Collection Rates
After the June 17th Public Hearing is opened and testimony from members of the public accepted, City Council may choose to:

1. Close the hearing and take action; or

2. Close the hearing and defer action until the close of the Budget Adoption Hearing on June 17th; or

3. Continue the hearing until the end of the Budget Adoption Hearing (should the Budget Adoption Hearing be continued to another Council meeting), and then reconvene the hearing, take any additional water and wastewater collection rate testimony, close the hearing, and take action.

The latter option has been used in prior years when the Budget Adoption process has spanned multiple City Council meetings. It is customary in such circumstances to continue to accept written protests up until the hearing is closed. Unless written protests are filed by a majority of affected water and wastewater customers, Council may vote on the proposed rate actions. If approved, the water and wastewater rates will become effective July 1, 2024. The City Council will also consider changes to the Financial Plans for the wastewater collection and water utilities, and should they take action to approve these plans, they will also become effective July 1, 2024.

Electric, Gas, Dark Fiber and Storm Water rates, as well as Utility Financial Plans The electric, gas, dark fiber and storm drainage rates will be considered at the June 17, 2024 public hearing. Should the City Council take action to approve any or all of these rates, they will become effective July 1, 2024. The City Council will also consider changes to Financial Plans and/or Reserve Management Policies for the electric and gas utilities, and should they take action to approve any or all of these Plans and/or Policies, they will also become effective July 1, 2024.

FISCAL/RESOURCE IMPACT
The resource impact of the recommendations summarized in this report is the continued financial solvency of the various utilities through the revenue increases described below.

Following are the estimated FY 2025 revenue impacts of the recommendations in this report relative to projected revenue for FY 2025 without changing utility rates:
•Staff anticipates normal year revenues for the Wastewater Collection Utility will increase by approximately $3.3 million in FY 2025 as a result of a 15% rate increase; •Estimated revenue for the Water Utility in FY 2025 is projected to increase approximately

9.5% or $4.6 million as a result of the proposed rate increases; •Normal year sales revenues for the Gas Utility in FY 2025 are projected to increase by roughly 12.5% to overall rates, with a projected distribution revenue increase of $7 million as a result of the proposed rate increases, not including fluctuations in commodity revenue/cost. The change in General Fund revenues from FY 2024 to FY 2025 would https://cityofpaloalto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyId=c05ba 13f-1c8a-4376-87b7-7d127a501824
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depend on the General Fund transfer alternative chosen by Council. Under the 14.5% transfer in FY 2025 alternative, which was supported by the Finance Committee during their discussion of the City annual budget in May 2024, the General Fund transfer would increase from $7.707 million in FY 2024 to $10.917 million in FY 2025, an increase of about $3.210 million.
•FY 2025 revenues for the Electric Utility are projected to remain very close to FY 2024 levels if Council adopts this report’s recommendations. The City is a non-residential utility customer and can expect a decrease in estimated City utility expenses of about $160,000, approximately $85,000 of that being in the General Fund. Streetlight expenses (which are paid from the General Fund) are projected to decrease by about $180,000.

Resource impacts to City departments and funds of the recommended rate adjustments are programmed in the FY 2025 Proposed Operating Budget. If the final rates adopted by Council in June differ from those proposed in this report, further adjustments may be brought forward as part of the annual budget process.

Utility
Systemwide Residential
Average
Rate Increase
FY 2025 Estimated
Overall
Revenue Impact
Electric 9% $0.8 million
Gas 12.5% $7.0 million
Water 9.5% $4.6 million
Wastewater Collection 15% $3.3 million
Stormwater Management 2.6% $0.2 million
Staff estimates the Fiber Optics rate increase will increase revenue $14,768 from the five remaining customers on the EDF-1 rate schedule.

Policy Implications
Policy implications related to the proposed wastewater collection, water, gas, electric, dark fiber and storm water management fee rate actions are detailed fully in the attached Resolutions and associated exhibits.

STAKEHOLDER ENGAGEMENT
The UAC reviewed preliminary financial forecasts for the Electric, Gas, Water and Wastewater Collection utilities at its January 3, 2024 meeting (Staff Report 2309-2080 11), and the Finance Committee reviewed those utilities’ preliminary forecasts at its February 21, 2024 meeting (Staff Report 2312-246812).
11 Staff Report 2309-2080 (UAC January 3, 2024);
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=73e00809-8d00-449b-9e3e-b3dc0b0a44dd 12 Staff Report 2312-2468 (UAC February 21, 2024);
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The UAC reviewed staff’s final recommendations for the Wastewater Collection, Water, Gas, and Electric utilities at its March 6, 2024 UAC meeting13, which were all passed unanimously.

The Finance Committee reviewed staff’s proposals for the following utilities at its April 23, 2024 Finance Committee meeting14, which were all passed unanimously (3-0):

1. Wastewater Collection (Staff Report 2402-2603 15)

2. Water (Staff Report 2402-2604 16)

3. Gas (Staff Report 2402-2605 17)

4. Electric (Staff Report 2401-2497 18)

5. Stormwater Management (Staff Report 2402-2614 19)
The Finance Committee voted on additional changes for the Gas Utility General Fund Transfer on May 8, 2024 and the Council discussed those changes on May 13, 2024 during a budget study session. This report discusses those changes above and the attached resolutions reflect the Committee’s direction. The FY 2025 Budget is being developed concurrent with these rates and, depending on the final rates, adjustments to the budget may be necessary.

Note that there were no specific stakeholder engagement meetings on Dark Fiber rates because there are only a few impacted customers and the rate is increasing by CPI consistent with past practice.

ENVIRONMENTAL REVIEW
Adoption of the attached Financial Plans and budgeted transfers does not meet the California Environmental Quality Act’s definition of a project, pursuant to Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(4) and (5), because it is a governmental fiscal and administrative activity which will not cause a direct or indirect physical change in the environment. Adoption of the proposed wastewater collection, water, gas, electric, storm water management fee, and dark fiber rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to 13 March 6, 2024 UAC meeting; https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=13458 14 April 23, 2024 Finance Committee meeting;
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=15049 15 Staff Report 2402-2603; https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=90274720-d4f9- 47c2-964a-5c722c99d7d8
16 Staff Report 2402-2604; https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=29e7b9c3- 6b38-4c11-8032-8f921445fdac
17 Staff Report 2402-2605; https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=d5e65956-71ef- 419d-b758-2a841ff14bef
18 Staff Report 2401-2497; https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=83d9b5c9-f71e- 4d48-8322-665a9b4754a9
19 Staff Report 2402-2614; https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=c05ba13f-1c8a- 4376-87b7-7d127a501824
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California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption.

ATTACHMENTS
Attachment A: Resolution for the Wastewater Collection Utility FY 2025 Attachment B: Resolution for the Water Utility FY 2025
Attachment C: Resolution for the Gas Utility FY 2025
Attachment D: Resolution for the Electric Utility FY 2025 Attachment E: Resolution for the Fiber Optic Utility FY 2025 Attachment F: Resolution for the Storm Water Management Fee Rates FY 2025 Attachment G: Table of URLs for Exhibits to Attachments A - F APPROVED BY:

Dean Batchelor, Director of Utilities
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Attachment A
* NOT YET APPROVED *

1 027052824
Resolution No.

Resolution of the Council of the City of Palo Alto Approving the FY 2025 Wastewater Collection Utility Financial Plan, Including Approval of a Short-Term Loan from the Fiber Optics Fund Reserve to the Wastewater Collection Fund Operations Reserve for FY 2024, and Adjusting Wastewater Rates by Amending Rate Schedules S-1 (Residential Wastewater Collection and Disposal), S-2 (Commercial Wastewater Collection and Disposal), S-6 (Restaurant Wastewater Collection and Disposal) and S-7 (Commercial Wastewater Collection and Disposal – Industrial Discharger)

R E C I T A L S

A. Each year the City of Palo Alto (“City”) assesses the financial position of its utilities with the goal of ensuring adequate revenue to fund operations. This includes making long-term projections of market conditions, the physical condition of the system, and other factors that could affect utility costs, and setting rates adequate to recover these costs. The City does this with the goal of providing safe, reliable, and sustainable utility services at competitive rates. The City adopts Financial Plans to summarize these projections.

B. The City uses reserves to protect against contingencies and to manage other aspects of its operations, and regularly assesses the adequacy of these reserves and the management practices governing their operation. The status of utility reserves and their management practices are included in Reserves Management Practices attached to and made a part of the Financial Plans.

C. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges.

D. On June 17, 2024, the City Council held a full and fair public hearing regarding the proposed rate increase and considered all protests against the proposals.

E. As required by Article XIII D, Section 6 of the California Constitution and applicable law, notice of the June 17, 2024 public hearing was mailed to all City of Palo Alto Utilities wastewater customers by April 29, 2024.

F. The City Clerk has tabulated the total number of written protests presented by the close of the public hearing, and determined that it was less than fifty percent (50%) of the total number of customers and property owners subject to the proposed wastewater rate amendments, therefore a majority protest does not exist against the proposal.

The Council of the City of Palo Alto does hereby RESOLVE as follows:

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Wastewater Resolution
FY25

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Attachment A
* NOT YET APPROVED *

2 027052824
SECTION 1. The Council hereby approves the FY 2025 Wastewater Collection Utility Financial Plan (Exhibit 1).

SECTION 2. The Council hereby approves a short term loan transfer from the Fiber Optics Fund Reserve to the Wastewater Collection Fund Operations Reserve of up to $3,000,000 for FY 2024, as described in the FY 2025 Wastewater Collection Utility Financial Plan (Exhibit 1).

SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-1 (Residential Wastewater Collection and Disposal) is hereby amended to read as attached and incorporated. Utility Rate Schedule S-1, as amended, shall become effective July 1, 2024 (Exhibit 2).

SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-2 (Commercial Wastewater Collection and Disposal) is hereby amended to read as attached and incorporated. Utility Rate Schedule S-2, as amended, shall become effective July 1, 2024 (Exhibit 2).

SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-6 (Restaurant Wastewater Collection and Disposal) is hereby amended to read as attached and incorporated. Utility Rate Schedule S-6, as amended, shall become effective July 1, 2024 (Exhibit 2).

SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S -7 (Commercial Wastewater Collection and Disposal – Industrial Discharger) is hereby amended to read as attached and incorporated. Utility Rate Schedule S-7, as amended, shall become effective July 1, 2024 (Exhibit 2).

SECTION 7. The Council finds that the revenue derived from the wastewater rates approved by this resolution do not exceed the funds required to provide wastewater service, and the revenue derived from the adoption of this resolution shall be used only for the purposes set forth in Article VII, Section 2, of the Charter of the City of Palo Alto.

SECTION 8. The Council finds that the fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product.

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Attachment A -
Wastewater Resolution
FY25

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* NOT YET APPROVED *

3 027052824

SECTION 9. The Council finds that the adoption of this resolution approving the FY 2025 Wastewater Collection Utility Financial Plan does not meet the California Environmental Quality Act’s definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment, and therefore, no environmental review is required. The Council finds that the adoption of this resolution changing Wastewater collection rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS
ATTEST:

City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

Assistant City Attorney City Manager
Director of Utilities
Director of Administrative Services
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Wastewater Resolution
FY25

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*NOT YET APPROVED* Attachment B
027052824 1
Resolution No.

Resolution of the Council of the City of Palo Alto Approving the FY 2025 Water Utility Financial Plan and Reserve Transfers, and Increasing Water Rates by Amending Rate Schedules W-1
(General Residential Water Service), W-2 (Water Service from Fire Hydrants), W-3 (Fire Service Connections), W-4 (Residential Master-Metered and General Non- Residential Water Service), and W-7 (Non-Residential Irrigation Water Service)

R E C I T A L S

A. Each year the City of Palo Alto (“City”) assesses the financial position of its utilities with the goal of ensuring adequate revenue to fund operations. This includes making long-term projections of market conditions, the physical condition of the system, and other factors that could affect utility costs, and setting rates adequate to recover these costs. The City does this with the goal of providing safe, reliable, and sustainable utility services at competitive rates. The City adopts Financial Plans to summarize these projections.

B. The City uses reserves to protect against contingencies and to manage other aspects of its operations, and regularly assesses the adequacy of these reserves and the management practices governing their operation. The status of utility reserves and their management practices are included in Reserves Management Practices attached to and made part of the Financial Plans.

C. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges.

D. On June 17, 2024, the City Council held a full and fair public hearing regarding the proposed rate increase and considered all protests against the proposals.

E. As required by Article XIII D, Section 6 of the California Constitution and applicable law, notice of the June 17, 2024 public hearing was mailed to all City of Palo Alto Utilities water customers by April 29, 2024.

F. The City Clerk has tabulated the total number of written protests presented by the close of the public hearing, and determined that it was less than fifty percent (50%) of the total number of customers and property owners subject to the proposed water rate amendments, therefore a majority protest does not exist against the proposal.

The Council of the City of Palo Alto does hereby RESOLVE as follows:

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Attachment B - Water
Resolution FY25

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*NOT YET APPROVED* Attachment B
027052824 2
SECTION 1. The Council hereby approves the FY 2025 Water Utility Financial Plan (Exhibit 1).

SECTION 2. The Council hereby approves a transfer from the Capital Improvement Program Reserve to the Operations Reserve of up to $3,461,000 in FY 2024 as described in the FY 2025 Water Utility Financial Plan (Exhibit 1).

SECTION 3. The Council hereby approves a transfer from the Rate Stabilization Reserve to the Operations Reserve of up to 2,069,000 in FY 2024 as described in the FY 2025 Water Utility Financial Plan (Exhibit 1).

SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-1 (General Residential Water Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-1, as amended, shall become effective July 1, 2024 (Exhibit 2).

SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-2 (Water Service from Fire Hydrants) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-2, as amended, shall become effective July 1, 2024 (Exhibit 2).

SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-3 (Fire Service Connections) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-3, as amended, shall become effective July 1, 2024 (Exhibit 2).

SECTION 7. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-4 (Residential Master-Metered and General Non-Residential Water Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule W- 4, as amended, shall become effective July 1, 2024 (Exhibit 2).

SECTION 8. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-7 (Non-Residential Irrigation Water Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule W-7, as amended, shall become effective July 1, 2024 (Exhibit 2).

SECTION 9. The City Council finds as follows:

a. Revenues derived from the water rates approved by this resolution do not exceed the funds required to provide water service.

b. Revenues derived from the water rates approved by this resolution shall not be used for any purpose other than providing water service, and the purposes set forth in Item 29
Attachment B - Water
Resolution FY25

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*NOT YET APPROVED* Attachment B
027052824 3
Article VII, Section 2, of the Charter of the City of Palo Alto.

c. The amount of the water rates imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the water service attributable to the parcel.

SECTION 10. The Council finds that the fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product.

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Resolution FY25

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*NOT YET APPROVED* Attachment B
027052824 4
SECTION 11. The Council finds that the adoption of this resolution approving the FY 2025 Water Financial Plan and Reserve transfers does not meet the California Environmental Quality Act’s (CEQA) definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment, and therefore, no environmental review is required. The Council finds that the adoption of this resolution changing water rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

Assistant City Attorney City Manager

Director of Utilities

Director of Administrative Services
Item 29
Attachment B - Water
Resolution FY25

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Attachment C
* NOT YET APPROVED *

6056816 1
Resolution No.

Resolution of the Council of the City of Palo Alto Approving the Fiscal Year 2025 Gas Utility Financial Plan and General Fund Transfer, and Increasing Gas Rates by Amending Rate Schedules G-1 (Residential Gas Service), G-2 (Residential Master-Metered and Commercial Gas Service), G-3 (Large Commercial Gas Service), and G- 10 (Compressed Natural Gas Service)

R E C I T A L S

A. Each year the City of Palo Alto (“City”) regularly assesses the financial position of its utilities with the goal of ensuring adequate revenue to fund operations, including reserves.

This includes making long-term projections of market conditions, the physical condition of the system, and other factors that could affect utility costs, and setting rates adequate to recover these costs. It does this with the goal of providing safe, reliable, and sustainable utility services at competitive rates. The City adopts Financial Plans to summarize these projections.

B. The City uses reserves to protect against contingencies and to manage other aspects of its operations, and regularly assesses the adequacy of these reserves and the management practices governing their operation. The status of utility reserves and their management practices are included in Reserves Management Practices attached to and made part of the Financial Plans.

C. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility se rvices, fees and charges.

D. On June 17, 2024, the City Council heard and approved the proposed rate increase at a noticed public hearing.

The Council of the City of Palo Alto does hereby RESOLVE as follows:

SECTION 1. The Council hereby approves the fiscal year (“FY”) 2025 Gas Utility Financial Plan (Exhibit 1), including the amendments to the Gas Utility Reserves Management Practices (Exhibit 2);

SECTION 2. The Council hereby approves the transfer of up to 14.5% of gas utility gross revenues received during FY 2023 to the general fund in FY 2025;

SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-1 (Residential Gas Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-1, as amended, shall become effective July 1, 2024 (Exhibit 3);

Item 29
Attachment C - Gas
Resolution FY25

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Attachment C
* NOT YET APPROVED *

6056816 2
SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-2 (Residential Master-Metered and Commercial Gas Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-2, as amended, shall become effective July 1, 2024 (Exhibit 3);

SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-3 (Large Commercial Gas Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-3, as amended, shall become effective July 1, 2024 (Exhibit 3);

SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-10 (Compressed Natural Gas Service Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule G-10, as amended, shall become effective July 1, 2024 (Exhibit 3);

SECTION 7. The City Council finds as follows:

a. Revenues derived from the gas rates approved by this resolution do not exceed the funds required to provide gas service.

b. Revenues derived from the gas rates approved by this resolution shall not be used for any purpose other than providing gas service, and the purposes set forth in Article VII, Section 2, of the Charter of the City of Palo Alto.

SECTION 8. The Council finds that the fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product.

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Attachment C - Gas
Resolution FY25

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Attachment C
* NOT YET APPROVED *

6056816 3
SECTION 9. The Council finds that approving the FY 2025 Gas Utility Financial Plan does not meet the California Environmental Quality Act’s (CEQA) definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment, and therefore, no environmental assessment is required. The Council finds that changing gas rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

Assistant City Attorney City Manager

Director of Utilities

Director of Administrative Services
Item 29
Attachment C - Gas
Resolution FY25

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NOT YET APPROVED
Attachment D

6056815
Utility Electric Rate Schedules
FY25 Electric Financial Plan
1 Resolution No.

Resolution of the Council of the City of Palo Alto Approving the Fiscal Year 2025 Electric Utility Financial Plan and Accepting the 2024 City of Palo Alto Electric Cost of Service and Rate Study, and Amending Utility Rate Schedules E-1 (Residential Electric Service), E-2 (Residential Master-Metered and Small Non-Residential Electric Service), E-2-G (Residential Master- Metered and Small Non-Residential Green Power Electric Service), E-4 (Medium Non-Residential Electric Service), E-4-G (Medium Non-Residential Green Power Electric Service), E-4 TOU (Medium Non-Residential Time of Use Electric Service), E-7 (Large Non-Residential Electric Service), E-7-G (Large Non- Residential Green Power Electric Service), E-7 TOU (Large Non- Residential Time of Use Electric Service), E-14 (Street Lights), E-NSE (Net Surplus Electricity Compensation Rate), and E-EEC (Export Electricity Compensation)

R E C I T A L S

A. Each year the City of Palo Alto (“City”) regularly assesses the financial position of its utilities with the goal of ensuring adequate revenue to fund operations. This includes making long-term projections of market conditions, the physical condition of the system, and other factors that could affect utility costs, and setting rates adequate to recover these costs. It does this with the goal of providing safe, reliable, and sustainable utility services at competitive rates.

The City adopts Financial Plans to summarize these projections.

B. The City uses reserves to protect against contingencies and to manage other aspects of its operations, and regularly assesses the adequacy of these reserves and the management practices governing their operation. The status of utility reserves and their management practices are included in Reserves Management Practices attached to and made part of the Financial Plans.

C. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges.

D. On June 17, 2024, the City Council heard and approved the proposed rate increase at a noticed public hearing.

The Council of the City of Palo Alto does hereby RESOLVE as follows:

Item 29
Attachment D - Electric
Resolution FY25

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Attachment D

6056815
Utility Electric Rate Schedules
FY25 Electric Financial Plan
SECTION 1. The Council hereby approves the FY 2025 Electric Utility Financial Plan (Exhibit 2), including the amended Electric Utility Reserves Management Practices in Appendix B of the Financial Plan and accepts the 2024 City of Palo Alto Electric Cost of Service and Rate Study (Exhibits 1.1 and 1.2).

SECTION 2. The Council hereby approves the following transfers to be made by the end of FY 2024, as described in the FY 2025 Electric Utility Financial Plan (Exhibit 2):

a. A transfer of up to $20 million from the Electric Special Projects Reserve to the Supply Operations Reserve; and
b. A transfer of up to $17 million from the Supply Operations Reserve to the Hydroelectric Stabilization Reserve; and
c. A transfer of up to $58 million from the Supply Operations Reserve to the Distribution Operations Reserve

SECTION 3. The Council hereby approves the following transfers to be made by the end of FY 2025, as described in the FY 2025 Electric Utility Financial Plan (Exhibit 2):

a. A transfer of up to $26 million from the Distribution Operations Reserve to the Supply Operations Reserve; and
b. A transfer of up to $30 million from the Supply Operations Reserve to the Electric Special Projects Reserve; and
c. A transfer of up to $5 million from the Distribution Operations Reserve to the CIP Reserve

SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-1 (Residential Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-1, as amended, shall become effective July 1, 2024 (Exhibit 3).

SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-2 (Residential Master-Metered and Small Non-Residential Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-2, as amended, shall become effective July 1, 2024 (Exhibit 3).

SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-2-G (Residential Master-Metered and Small Non-Residential Green Power Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-2-G, as amended, shall become effective July 1, 2024 (Exhibit 3).

Item 29
Attachment D - Electric
Resolution FY25

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Attachment D

6056815
Utility Electric Rate Schedules
FY25 Electric Financial Plan
SECTION 7. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-4 (Medium Non-Residential Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E -4, as amended, shall become effective July 1, 2024 (Exhibit 3).

SECTION 8. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-4-G (Medium Non-Residential Green Power Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-4-G, as amended, shall become effective July 1, 2024 (Exhibit 3).

SECTION 9. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-4 TOU (Medium Non-Residential Time of Use Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-4 TOU, as amended, shall become effective July 1, 2024 (Exhibit 3).

SECTION 10. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-7 (Large Non-Residential Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-7, as amended, shall become effective July 1, 2024 (Exhibit 3).

SECTION 11. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-7-G (Large Non-Residential Green Power Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-7-G, as amended, shall become effective July 1, 2024 (Exhibit 3).

SECTION 12. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-7 TOU (Large Non-Residential Time of Use Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-7 TOU, as amended, shall become effective July 1, 2024 (Exhibit 3).

SECTION 13. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-14 (Street Lights) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-7 TOU, as amended, shall become effective July 1, 2024 (Exhibit 3).

SECTION 14. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E -NSE (Net Surplus Electricity Compensation Rate) is hereby amended to read as attached and inco rporated. Utility Rate Schedule E -NSE-1, as amended, shall become effective July 1, 2024 (Exhibit 3).

SECTION 15. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-EEC-1 (Export Electricity Compensation) is hereby amended to read as attached and Item 29
Attachment D - Electric
Resolution FY25

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Attachment D

6056815
Utility Electric Rate Schedules
FY25 Electric Financial Plan
incorporated. Utility Rate Schedule E -EEC-1, as amended, shall become effective July 1, 2024 (Exhibit 3).

SECTION 16. The Council makes the following findings:

a. The revenue derived from the adoption of this resolution shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. b. The fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product.

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Resolution FY25

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Utility Electric Rate Schedules
FY25 Electric Financial Plan
SECTION 17. The Council finds that approving the Financial Plan and Reserve transfers does not meet the California Environmental Quality Act’s (CEQA) definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment, and therefore, no environmental assessment is required. The Council finds that changing electric rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and CEQA Guidelines Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

City Clerk

Mayor
APPROVED AS TO FORM:

APPROVED:

Assistant City Attorney

City Manager

Director of Utilities

Director of Administrative Services
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Attachment D - Electric
Resolution FY25

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* NOT YET APPROVED *
Attachment E

6056841 1

Resolution No. _________

Resolution of the Council of the City of Palo Alto Adopting a Dark Fiber Rate Increase and Amending Rate Schedules EDF-1 (Dark Fiber Licensing Services), and EDF-2 (Dark Fiber Connection Fees)

The Council of the City of Palo Alto does hereby RESOLVE as follows:

SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule EDF-1 (Dark Fiber Licensing Services) is hereby amended to read as attached and incorporated. Utility Rate Schedule EDF-1, as amended, shall become effective July 1, 2024.

SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule EDF-2 (Dark Fiber Connection Fees) is hereby amended to read as attached and incorporated. Utility Rate Schedule EDF-2, as amended, shall become effective July 1, 2024.

SECTION 3. The Council finds that the revenue derived from the adoption of this resolution shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto.

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Resolution FY25

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Attachment E

6056841 2

SECTION 4. The Council finds that the adoption of this resolution increasing Dark Fiber utility rates by the Consumer Price Index to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

Assistant City Attorney City Manager
Director of Utilities

Director of Administrative Services

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Resolution FY25

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*NOT YET APPROVED*
1 6056842
Resolution No. ______

Resolution of the Council of the City of Palo Alto Amending Utility Rate Schedule D-1 (Storm and Surface Water Drainage) to Increase Storm Water Management Fee Rates by

2.6% Per Month Per Equivalent Residential Unit for Fiscal Year 2025

R E C I T A L S

A. In April 2017, a majority of property owners approved a ballot measure adopting a monthly Storm Water Management Fee to fund storm drain capital improvements projects, enhanced maintenance of the storm drain system, storm water quality protection programs, and related activities.

B. The ballot measure allowed for annual increases to the fee based on lesser of the local rate of inflation (based on changes to the Consumer Price Index for the San Francisco- Oakland-San Jose region as published by the Bureau of Labor Statistics) or 6%.

C. According to the Bureau of Labor Statistics, the Consumer Price Index for the San Francisco-Oakland-San Jose region increased by 2.6% between December 2022 and December 2023.

The Council of the City of Palo Alto does hereby RESOLVES as follows:

SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule D-1 (Storm and Surface Water Drainage) is hereby amended to read in accordance with sheet D-1-1, attached hereto and incorporated herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2024.

SECTION 2. The Council finds that this rate increase is being imposed to offset the effects of inflation on labor and material costs pursuant to the annual inflationary fee escalator provision of the Storm Water Management Fee ballot measure, which was approved by a majority of Palo Alto property owners on April 11, 2017.

SECTION 3. The Council finds that the revenue derived from the authorized adoption enumerated herein shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto.

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Attachment F
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Attachment F - Storm
Water Management Fee
Resolution

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SECTION 4. The Council finds that the adoption of this resolution changing the Storm Water Management Fee to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15378(b)(4). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

__________________________ _____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

___________________________ _____________________________ Assistant City Attorney City Manager

_____________________________
Director of Public Works

_____________________________
Director of Administrative Services

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Attachment F - Storm
Water Management Fee
Resolution

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Attachment G “Table of URLs for the Exhibits to Attachments A – F” 1 Attachment Exhibit Title URL
A 1 Wastewater
Collection Utility
Financial Plan FY
2025
https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/wastewater- financial-plan-fy25.pdf
A 2 Wastewater
Collection Utility Rate
Schedules FY 2025
https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/wastewater- rate-schedules-fy25.pdf
B 1 Water Utility
Financial Plan FY
2025
https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/water-financial- plan-fy25.pdf
B 2 Water Utility Rate
Schedules FY 2025
https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/water-rate- schedules-fy25.pdf
C 1 Gas Utility Financial
Plan FY 2025
https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/gas-financial- plan-fy25.pdf
C 2 Amended Gas Utility
Reserve
Management
Practices
https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/gas-reserve- management-practices-fy25.pdf
C 3 Gas Utility Rate
Schedules FY 2025
https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/gas-rate- schedules-fy25.pdf
D 1.1 2024 City of Palo Alto
Electric Cost of
Service and Rate
Study
https://www.cityofpaloalto.org/files/assets/public/v/3/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/electric-cosa.pdf D 1.2 COSA Technical
Appendix
https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/techincal- appendix.pdf
D 2 Electric Utility
Financial Plan FY
2025
https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/electric-utility- financial-plan-fy25.pdf
D 3 Electric Utility Rates
Schedules FY 2025
https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/electric-rates- schedule.pdf

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Attachment G - Table of
URLs for Exhibits

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Attachment G “Table of URLs for the Exhibits to Attachments A – F” 2 Attachment Exhibit Title URL
D 4 Amended Electric
Utility Reserves
Management
Practices
https://www.cityofpaloalto.org/files/assets/public/v/3/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/amended- electric-utility-reserves-management-practices.pdf
E 1 Fiber Optic Utility
Rate Schedules FY
2025
https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/fiber-rate- schedules-fy25.pdf
F 1 Storm and Surface
Drainage Rate
Schedule FY 2025
https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/attachments/2024-rates/storm-and- surface-drainage-rate-schedule.pdf

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URLs for Exhibits

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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Utilities
Meeting Date: June 17, 2024
Staff Report: 2405-2996
TITLE
Approve Retention of the Current Western Area Power Administration (WAPA) Hydroelectricity Base Resource Contract Allocation From 2025-2030; CEQA Status: Not a Project.

RECOMMENDATION
The Utilities Advisory Commission and staff recommend that the City Council keep the City of Palo Alto’s full share of its allocated hydroelectric resource under the current hydroelectricity supply contract, the 2025 Base Resource Contract from Sierra Nevada Region of the Western Area Power Administration (2025 WAPA Contract), as approved by Council in February of 2021 (Staff Report #116791).

Note: No action from City Council is required to remain in the contract at the current resource allocation percentage (12.06299%). Staff will revisit project financial impact in 2029 and make a recommendation for the period of 2030 through 2034. The decision to reduce the contract allocation or terminate the contract will be revisited every five years until the last termination opportunity in 2049.

EXECUTIVE SUMMARY
In 2021 the City Council approved the 2025 WAPA Contract, which allocates to the City a

12.06299% share of the WAPA contract’s base resource generation from 2025-2055. As negotiated, the City has the option to reduce its allocation or terminate the 2025 WAPA Contract until June 30, 2025. The current decision is whether to maintain, decrease, or exit our hydroelectricity supply contract with WAPA for the years 2025 – 2030. If the City chooses to keep this contract in the electricity supply portfolio at the current allocation percentage, there will be an opportunity to reduce or eliminate the City’s resource allocation share again in 2029, and every five years until the contract terminates in 2054. Exiting the contract or reducing the 1 Staff Report 11679 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/year-archive/2021/02-01-21-id-11679.pdf Item 30
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contract allocation share is a permanent decision through the remaining duration of the contract (2054).

Extensive analysis was completed to support this recommendation to extend the full share of contract, which will continue to provide approximately 40% of the City’s current electricity supply. The recommendation to keep the hydroelectric contract is driven by high market electricity prices, improved project cost control, and greatly improved operational flexibility of the project. City of Palo Alto Utilities (CPAU) is working alongside WAPA to increase flexibility of the hydroelectric resource, to mitigate risks to the project, and to improve value in the rapidly changing electricity markets of the Western U.S.

Staff would like to highlight exceptional efforts over the last eight years by federal staff at both WAPA and U.S. Bureau of Reclamation (USBR) who have worked with power customers to increase project flexibility while lowering costs. This continued partnership with power customers helps to mitigate the risks and uncertainties inherent in the contract.

BACKGROUND
CPAU has been a power customer of the USBR and WAPA since 1960. The City signed the current contract in 2000 (CMR 378:00, Resolution 80072) which began delivering hydroelectric power to the City in 2005 and would terminate if not extended by December 31, 2024. The City Council approved the 2025 WAPA Contract extension in 2021 after nearly seven years of negotiation (Staff Report #116793). This 2025 WAPA Contract extension runs from 2025-2054 unless the City decides to reduce its resource allocation percentage or exit the contract. The City can choose to reduce its resource allocation or exit the contract before June 30, 2024, and then may reconsider every five years thereafter for duration of the 30-year extension, assuming the City remains in the contract through the full extension term. Therefore, while this is potentially a 30-year extension, any decision to remain at the City’s current resource allocation percentage is only binding for the next five years from January 1, 2025 to December 31, 2029. Most renewable and hydroelectricity contracts require a ten to twenty-year commitment, so the opportunity to reduce or end the contract every five years is a somewhat rare flexibility. A decision to reduce the City’s allocation percentage or terminate the agreement will be permanent for the remainder of the 30-year extension period.

In 2020 WAPA completed a cost-of-service study which found that power customers such as the City had overpaid over the lifetime of the project since 1930. WAPA has been returning overpaid funds to the City and other power customers since 2021 and that will continue through 2030, 4 and if the City exits the contract in 2025 then overpaid funds will not be reimbursed to the City. 2 Resolution 8007 https://www.cityofpaloalto.org/files/assets/public/v/1/city-clerk/resolutions/reso8007.pdf 3 Staff Report 11679 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/year-archive/2021/id-11679.pdf 4 WAPA’s financial limitations do not allow return of funds by 2025.

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The contractual costs have been estimated by WAPA and USBR to be about $9M in 2025 escalating to about $11.5M in 2030. Contractual costs are not fixed, but WAPA and USBR aim for cost stability year to year.

The 2025 WAPA Contract governs a hydroelectricity resource which comes almost entirely from the Central Valley Project. The Central Valley Project is a federal water storage and conveyance project consisting of twenty reservoirs, ten generating power plants, three pump stations, and 643 miles of canals. The Central Valley Project can generate up to 2,000 MW and delivers about seven-million-acre feet of water 500 miles south each year. Most of the water delivered irrigates agriculture in the southern part of the California Central Valley. As a reference this is equivalent to moving water from Jamestown New York, on Lake Erie, to Spartanburg South Carolina. Figure 1 shows the entire project spanning much of California. Figure 2 shows a simplified diagram of the Central Valley Project focused on the reservoirs, power plants and pumping stations. CPAU currently purchases about 12% of the Base Resource hydroelectricity, which is the surplus electricity from the project and amounts to about 65% of the total generation of the Central Valley Project.
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Figure 1. USBR Map of Central Valley Project- By Shannon1 - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=47015188 Item 30
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Figure 2.Simplified diagram of the Central Valley Project (CVP). A few State Water Project (SWP) units are shown when they are closely integrated or shared with the CVP. Credit: Cary Fox, USBR 2024

ANALYSIS
To determine whether or not to recommend keeping the status quo under this contract extension, modeling with Ascend Analytics energy software as well as a broader uncertainty and sensitivity analyses was completed. Supplemental sensitivity and uncertainty analysis was performed to illustrate the magnitude of the uncertainties and to verify the Ascend model results with more conservative assumptions.

Ascend Analytics Analysis
Staff and the Ascend Analytics team completed robust analysis of the energy value under the 2025 WAPA Contract, using hundreds of Monte Carlo simulations 5 comparing WAPA to other resources and variable forward-market prices. Several large community choice aggregators use Ascend Analytics tools for valuation of electricity supply contracts as it is considered one of the best-in-class tools currently available.

Ascend uses current market prices along with planned transmission projects and generation projects to create a custom market price forecast for the California ISO area. These price forecasts by region within the California ISO are then used to generate project-specific price forecasts at 5 Monte Carlo simulations are used to model the probability of different outcomes when a number of the inputs in models have large uncertainties associated. It is a technique used to understand the impact of risk and uncertainty.

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each ISO node. This nodal price granularity provides improved accuracy for project revenue projections.

The model dispatched the hydropower from the 2025 WAPA Contract realistically, respecting hourly maximum and minimum constraints (which change daily but, were modeled by a representative day per month) and then shaping the output around the highest priced hours. The modeling implemented monthly and annual total energy constraints which were tied to the precipitation of that year. Modeling also swept a broad modeling space with large variations in precipitation each year and a large range of forward-market electricity prices to reflect the current unpredictable conditions to assist in studying the range of possibilities.

Supplemental Sensitivity and Uncertainty Analysis
The primary purposes of the supplemental analyses were to explore a broader set of uncertainties, and more conservative scenarios than were considered with Ascend. The supplemental analyses performed by staff included:
- Input lower energy prices since forward-market prices have come down since last year when the IRP modeling was completed, and explore sensitivity of results to a broader range of prices
- Quantify the impact of highly variable precipitation as an explicit cost adder of the project as the variable generation (steady costs are an intrinsic cost of the current 2025 WAPA Contract) - Quantify the cost to the City’s electricity portfolio of the seasonal mismatch of generation from WAPA, which generates in the spring and summer, versus the City’s electric portfolio needs, which are mostly in the fall and winter
- Quantify the cost adder due to the inaccurate month-ahead forecast from WAPA - Map the magnitude of uncertainties that should be planned for via hydroelectricity reserves if City keeps its status quo allocation under the 2025 WAPA contract - Map the sensitivity to each of the additional costs and potential regulatory risks.

Supplemental Costs Included in Analysis
Actual costs of the 2025 WAPA contract in the City’s electric utility resource portfolio are greater than the contractual costs, due to: the hydrologic variability which we self-insure against and partially pass through to customers (via the large hydro adder), the high cost of supplemental energy in dry years, and the cost monthly forecasting errors. These and other costs are described in more detail below and are included as intrinsic costs to the project.

Cost of precipitation variability:
- The structure of the 2025 WAPA Contract is that CPAU must pay fully for the contracted allocation amount, no matter how much energy is generated. This means CPAU pays an extremely volatile price per unit of electricity from year to year given the extreme swings from wet to dry years in California. For example:
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oIn 2021 CPAU received about 50% of long-term average generation expected - Back-to-back dry years and extreme multi-year droughts are becoming more common in California, which effectively increases the reserve funds CPAU needs to self-insure against precipitation variability through the Hydroelectric Stabilization Reserve. CPAU limits the self- insurance costs by accepting some level of volatility in electricity rates, as CPAU passes through to customers some costs in Hydro Rate Adjustment surcharge.

Cost of seasonal mismatch with CPAU electric portfolio:
- WAPA delivers electricity mostly in the Spring and Summer, when CPAU’s electric portfolio already has a surplus, requiring CPAU to sell power from other projects during low price seasons, and purchase market power during higher priced Fall and Winter to comply with risk management guidelines. The seasonal mismatch to CPAU’s electric portfolio is quantified and included additional cost to capture the full cost of keeping the 2025 WAPA Contract.

Cost of month-ahead forecast errors:
- Poor forecasts add cost and exposure to the day-ahead market if the energy is not delivered as expected for the current month. The month-ahead forecasts from WAPA have been shown to have persistent inaccuracies to due to the operational complexity of the project and the reservoir, streamflow, temperature, dissolved oxygen, and pumping requirements. This cost is quantified and included in staff’s analysis.

Supplemental Uncertainties Included in Analysis
- Exploring a broader range of low power prices similar to 2019 power price levels as an additional conservative sensitivity analysis
- Additional environmental costs which could be added to the contract cost analysis in the future under some interpretations of the Central Valley Improvement Act - Lower generation from the project from both climate change and additional environmental constraints which would lower absolute generation which could be implemented as part of federal and state proceedings
- Lower value generation from more generation being shifted into spring months with lower value from both reduced snowpack and additional environmental constraints being considered at the state and federal level

RESULTS
Overall, the 2025 WAPA Contract competed favorably under the large majority of scenarios explored, due to the dispatchable nature of the hydroelectricity. The improved dispatchability allows the project to generate in the late evening hours of the summer and even to some extent year-round as the overbuild of solar generation causes shortfalls of dispatchable power in the evening hours. The new flexibility of the project benefits from the increasing seasonal and hourly volatility from surplus solar in California. USBR operators are currently cycling pumped storage within the day to capture additional power revenues, backing down generation and spilling water Item 30
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over dams to capture negative prices, and pumping during the middle of the day to capture negative prices. These operational improvements are new in the last few years and are saving millions of dollars per year to CPAU and other power customers.

Results of Analysis with Ascend Analytics
The WAPA contract was chosen over competing resources in nearly every scenario of hundreds designed by staff and run by Ascend Analytics. The WAPA contract also had a positive net energy value in nearly every scenario. Some important caveats to these Ascend results are that the forward-market energy prices were very high last year, and that the supplemental cost of the inaccuracy of the month-ahead forecast were not explicitly added to the cost of the WAPA electric product.

Results of Supplemental Uncertainty and Sensitivity Analysis The results of the additional uncertainty and sensitivity analysis are shown in Figure 3. Key takeaways are that the uncertainties are large especially in the latter years, but overall, the 2025 WAPA Contract will likely have a positive net value to CPAU.

The largest drivers of the positive net value are high market electricity prices and the higher likelihood of better than average generation in 2025 and 2026. The probability of relatively high hydroelectricity generation in 2025 and 2026 is due to the very high precipitation in 2023 and the average precipitation 2024.

The primary drivers of the decreasing value over time are the increasing chance of dry years over the next five years, increasing costs, and decreasing power market prices. Current market price forecasts expect prices to decline from today through 2030, and each forecast for several months has slightly accelerated this projected decline.

The largest drivers of uncertainty are the variability of power prices, variability of precipitation, and regulatory risks to the amount and timing of generation.

The magnitude of uncertainty one year out into the future is approximately $7-$15M. With climate change increasing the likelihood of multiyear droughts in the future, CPAU may need to consider increasing the hydro reserve fund to ensure rate stability.

Alternatives Analyzed
The modeling using Ascend Analytics energy software compared WAPA to several alternatives.

This modeling showed that overall WAPA outperformed other available carbon-free electricity resources in the Western US. Internal additional analysis confirmed that WAPA is most likely less expensive and more resilient to emerging risks (increasing volatility, lower average prices) than all other carbon-free electricity sources currently available. These advantages were maintained even accounting for climate change uncertainties with large hydroelectric. If CPAU electricity load grows, we may consider local round-the-clock resources for additional diversity as our current portfolio is heavy in remote hydroelectric and solar resources. Staff have Item 30
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assessed that the marginal diversity benefit of decreasing our exposure to hydroelectricity by decreasing the WAPA contract is far outweighed by the flexibility and cost of the WAPA resource.

Figure 3. Results of the supplemental uncertainty and sensitivity analysis for years 2025-2029.

FISCAL/RESOURCE IMPACT
Although there is a great deal of uncertainty due to regulatory risks and precipitation uncertainty, CPAU is expected to save money in aggregate over the next five years by retaining the resource.

The annual costs are estimated to be $9M in 2025 and escalate to approximately $11.5M in 2029.

Alternatives to continuing with the 2025 WAPA Contract are likely substantially more expensive in the next two to three years. There are larger risks and uncertainties associated with the project in the latter two to three years of the period analyzed (2027-2029). Staff is engaged with federal staff partners to mitigate those risks as much as possible by operational improvements and facility upgrades.

POLICY IMPLICATIONS
Keeping the current resource allocation under the 2025 WAPA Contract is consistent with the 2023 Electric Utilities Integrated Resource Plan, the Utilities Strategic Plan, the Sustainability Implementation Plans, and the City’s Sustainability and Climate Action Plan (S/CAP).

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STAKEHOLDER ENGAGEMENT
Staff presented the recommendation to extend the maximum available share of the WAPA Base Resource to the UAC May 1, 20246. UAC members asked for clarification about:

1. Why the value of the project is going down over time? a. Energy prices are currently projected to go down over the 2025-2029 timeframe, meaning the revenue from this generation would also go down.

2. If it were possible to sign up for only the years where the project was projected to be profitable, such as 2025-2027?
a. Our current WAPA contract is a 20-year contract, and that technically this contract extension is a 30-year contract, with the option to decrease our share or terminate every five years. That flexibility to decrease or exit every five years was the result of contract negotiations.

3. What the WAPA bar chart of costs the really meant in the presentation 7? a. Costs in 2024 were lower than in any year since 2010. This is largely because staff had worked closely with Western to get more value from WAPA transmission charging more to their transmission customers and generating more revenue from the project by operating it more flexibly and also participating in the Energy Imbalance Market.

4. How could costs of WAPA be going down if our rates were going up? a. City rates are not only driven by the profitability of our electricity supply, but also by transmission costs and reliability products such as resource adequacy, the cost of both of which is going up.

The recommendation was approved with all six UAC Commissioners in attendance.

ENVIRONMENTAL REVIEW
The City Council’s approval regarding remaining in this contract extension does not require California Environmental Quality Act review, because it does not meet the definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), as an administrative governmental activity which will not cause a direct or indirect physical change in the environment. WAPA’s 2025 Power Marketing Plan authorizing the contract has a Categorical Exclusion from National Environmental Policy Act (NEPA) review since WAPA is reallocating its existing resources and is not planning to increase its generation or transmission.

APPROVED BY:

Dean Batchelor, Director of Utilities Staff: Lena Perkins, PhD, Senior Resource Planner 6 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/utilities- advisory-commission/archived-agenda-and-minutes/agendas-and-minutes-2024/05-may-2024/05-01-2024- packet-v2.pdf Beginning page 14 of the pdf
7 UAC Presentation https://portal.laserfiche.com/Portal/DocView.aspx?id=72135&repo=r- 704298fc&searchid=892593e2-02da-4c35-a291-f873f79be6f4
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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Transportation

Meeting Date: June 17, 2024
Report #:2405-3046
TITLE
Discussion Regarding Caltrans’ Repaving Project on El Camino Real Replacing Existing Parking with Bicycle Lanes, Authority for Staff to Make Adjustments to the Residential Preferential Parking Permit Programs and Return to Council on Consent if Needed, Authority for Staff to Enter into Agreements As Needed to Provide Temporary Safe Parking Along the Corridor in Palo Alto, and Approval of a Resolution Supporting the Removal of On-Street Parking for this Project; CEQA status – categorically exempt.

RECOMMENDATION
Staff recommends that Council take the following actions:

A. Review the revised plans from Caltrans regarding the Caltrans project to repave El Camino Real that will repurpose parking spaces for bicycle lanes, B. Authorize the City Manager or their designee to direct staff to make necessary adjustments to the RPP Programs and return to Council on consent if needed, C. Authorize the City Manager or their designee to enter into agreements as needed to provide temporary safe parking for those currently along the project corridor in Palo Alto, and
D. Approve a resolution supporting the removal of on-street parking for this project.

EXECUTIVE SUMMARY
Staff anticipates that the Caltrans El Camino Real Council ad hoc Committee may wish to amend the staff recommendation to impose conditions on adoption of the resolution. Those conditions may include things like:
x Transmittal of the Fehr & Peers review memo and the joint City and VTA memo (Attachments A & D) to Caltrans with a request that Caltrans respond to requested changes
x City-proposed locations in Attachment E for additional No Right Turn on Red restrictions Item 31
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x Development of a new Maintenance Agreement with Caltrans for the bikeway project x A Caltrans commitment to expediting encroachment permits on El Camino Real x Caltrans provision of tentative and final project timelines, when available, for public notification efforts

This report is a follow-up from the April 1, 2024 City Council meeting discussion of Caltrans’ proposal to eliminate parking lanes and replace them with bicycle lanes on El Camino Real (ECR) throughout Palo Alto.
1 As proposed, the replacement of parking with bike lanes would occur during the upcoming Caltrans repaving project to be done in Palo Alto. While Caltrans staff have consistently expressed a desire to collaborate with the City on improving safety on El Camino Real, to date, Caltrans has indicated that its analysis of safety issues along ECR require the agency to take action.

On April 1, 2024 the City Council provided direction by:
1) Requesting Caltrans return with additional safety measures based on Safe Systems Approach, applicable Caltrans Design Information Bulletins, and a complete street network approach
2) Creating an ad hoc committee of council members to consult with staff, Valley Transportation Authority (VTA) staff, bicycle advocates, and other stakeholders including the Chamber of Commerce that would focus on:
a. Prioritizing a plan for safety improvements at intersections and conflict areas b. Conducting outreach to small-business community and neighborhoods to identify parking alternatives including modifications to the City’s Residential Preferential Parking (RPP) districts and work with the Transportation Management Association (TMA)
c. Coordinating efforts to accommodate RV Dwellers along El Camino Real This report provides an update on how the above direction has been addressed and options for how to proceed from this point.

The City’s engagement with Caltrans has led to significant safety improvements in the Caltrans proposal. While Caltrans’ ability to fully implement a Safe System Approach is limited by several factors, the outcome of the collaboration to date has yielded an improved plan and a mutual understanding that El Camino Real will require future planning and study to further reduce road user conflicts in key locations along the corridor.

This report also includes attachments providing additional information and context. x Attachment A: Updated plans from Caltrans with an accompanying memo detailing

1 See Caltrans draft plans dated May 20, 2024.

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the review completed by the City’s Transportation consultant, Fehr and Peers. x Attachment B: Resolution for Council consideration endorsing the removal of parking spaces from El Camino Real for bike lanes
x Attachment C: Caltrans’ Bicycle Counts along El Camino Real x Attachment D: Joint City of Palo Alto/VTA Memo presenting Review and Comments on Bike and Bus Conflict Areas
x Attachment E: Matrix of Proposed No Right Turn on Red Restrictions If Council approves the resolution for the removal of parking spaces from ECR for bicycle lanes, staff will return to Council for follow-up actions that require council approval as necessary and appropriate. Such actions may include changes to the RPP, longer-term agreements to provide safe parking to those currently dwelling in vehicles along the project corridor, or additional follow-up items.

BACKGROUND
El Camino Real (State Route 82) is a state highway maintained by Caltrans. To meet the requirements of its Capital Preventive Maintenance (CAPM) program, Caltrans is repaving El Camino Real in Mountain View, Los Altos, and Palo Alto to improve ride quality, comply with current ADA standards, and improve safety, access, and mobility of pedestrians and bicyclists.

The project will repair pavement and upgrade existing non-standard ADA curb ramps and add complete street elements.
2 There has been significant work on this project to-date. For additional background on this topic, please reference the City Council Staff Report from April 1, 2024 (Agenda Item 11)3. On April 1, 2024, Caltrans presented slides during the City Council meeting and discussed the proposed bikeway implementation in Palo Alto and the Caltrans SR 82 Paving Project.4 Through motion, City Council requested that Caltrans return with added safety measures in the bike lane design based on the Safety System Approach Design and other best practices, and created an ad hoc committee to focus on safety improvements at conflict areas and intersections, identify alternatives to minimize parking impacts to small businesses and the community, and coordinate efforts to accommodate vehicle dwellers along the project corridor.

Mayor Stone appointed Council Members Ed Lauing and Pat Burt to the ad hoc committee. The ad hoc met frequently with staff and other stakeholders and has also corresponded over e-mail with staff to discuss developments on this project. Meetings took place throughout April, May,

2 Caltrans project website: SR-82 – Pavement Rehabilitation and ADA Improvements 3 CC Staff Report (Agenda Item 11), April 1, 2024
4 The meeting recording is available on the City’s YouTube channel: https://www.youtube.com/c/cityofpaloalto.

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and June (April 25, April 30, May 9, May 16 (joint workshop), and June 5) to ensure this important work continued to advance.

On May 15, 2024, Caltrans sent the City the third iteration of the proposed draft bikeway plans with added safety measures based on the Safe Systems Approach and other industry standards, per City Council request. These plans were reviewed during the joint workshop held on May 16, 2024 that included the members of the ad hoc, City Staff, Caltrans staff, VTA staff, Fehr & Peers, and biking advocate stakeholders including representatives from the City’s Pedestrian and Bicycle Advisory Committee (PABAC), and the Silicon Valley Bicycle Coalition (SVBC).

Following the workshop, Caltrans sent the City the fourth iteration of the proposed draft bikeway plans, dated May 20, 2024. This plan has been posted to the City’s website. 5 City staff engaged Fehr & Peers to conduct a comprehensive review of the May 20 bikeway plans to confirm whether the plan is in alignment with Caltrans’ Design Information Bulletin-94 (DIB-94) and the Safe System Approach. Fehr & Peers’ memorandum and comments on the draft bikeway plans with recommended modifications for Caltrans’ consideration are included as Attachment A to this report. A detailed summary of the changes from the January 22, 2024 plans that were discussed with City Council on April 1 and the revised bikeway plan from May 20, 2024 can be found on the City’s website.
6 ANALYSIS
This section will provide updates on each of the four main areas from Council’s April 1 direction which focused on:
1) Requesting Caltrans return with additional safety measures based on Safe Systems Approach, applicable Caltrans Design Information Bulletins, and a complete street network approach
2) Using the ad hoc to prioritize a plan for safety improvements at intersections and conflict areas between motorized vehicles, buses, bicycles, and pedestrians 3) Using the ad hoc to conduct outreach to small-business community and neighborhoods to identify parking alternatives including modifications to the City’s Residential Preferential Parking (RPP) districts and work with the Transportation Management Association (TMA)
4) Using the ad hoc to coordinate efforts to accommodate RV Dwellers along El Camino Real

5 Draft Caltrans Bikeway Plan, dated May 20, 2024
6 See City website: City Issues Letter to Caltrans SR82 El Camino Real Bikeway Project Item 31
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Given the significant overlap between the first two topics, they are grouped together in this section with subsections elaborating on bicycle and bus interactions and the potential for greater ‘No Right Turn on Red’ restrictions. Following the updates of each of these four items, additional considerations are presented for discussion with the City Council, as well as information about what future Caltrans projects may entail and potential additional City Council actions.

Requesting Caltrans return with additional safety measures based on Safe Systems Approach, applicable Caltrans Design Information Bulletins, and a complete street network approach and Using the ad hoc to Prioritizing a plan for safety improvements at intersections and conflict areas

As noted in correspondence with the City, the bike lane proposal is a response to Caltrans policies to reduce risk to vulnerable road users on State Route 82. Caltrans has adopted both a Safe System Approach and a Vision Zero goal in roadway safety planning across California to eliminate traffic deaths and severe injuries.
7 This approach identifies traffic safety as the
highest priority for the design and operation of the transportation system and views traffic fatalities and severe injuries as unacceptable and preventable through joint action. The Safe System Approach is the foundation for the National Safety Strategy released by the US Department of Transportation in 2022.
8 To bring the Safe System Approach into statewide roadway design, Caltrans issued Design Information Bulletin – 94 (DIB-94), effective on January 16, 2024, which provides Caltrans staff guidelines on how to select and incorporate transit, bicycle, and pedestrian facilities to match their urban context.9 This bulletin alters Caltrans design guidance to “minimize the transfer of kinetic energy through the adoption of design elements that minimize crash speeds and impact angles.”10 City staff have requested clarification of whether DIB-94 applies to the repaving project given that the recent bike lane draft plans were dated after January 16, 2024. In their written response to PTC Commissioner George Lu, Caltrans stated that DIB-94 was applied to the bicycle lane proposal.
11 According to El Camino Real bike counts recently provided by Caltrans, cyclists generally cross El Camino Real ride on the correct side of the street where bike lanes are provided. However, where there are no bike lanes, cyclists on El Camino Real more often ride the wrong way and on the sidewalk. Attachment C to this report details Caltrans’ bicycle counts on El Camino Real.

7 https://dot.ca.gov/news-releases/news-release-2022-009 8 https://www.transportation.gov/nrss/usdot-national-roadway-safety-strategy 9 Design Information Bulletin-94 Complete Streets: Contextual Design Guidance 10 Design Information Bulletin-94 Complete Streets: Contextual Design Guidance, p. 17 11 Caltrans Response to Commissioner Lu, March 11, 2024 Item 31
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As mentioned earlier, Fehr & Peers prepared a memorandum and comments on the draft bikeway plans, dated May 20, 2024, with recommended modifications for Caltrans’ consideration based on Design Information Bulletin-94 (DIB-94) and the Safe Systems Approach (Attachment A).

The memorandum notes that the Caltrans proposal reflects improvements delivered as part of the State Highway Operation and Protection Program (SHOPP), which has limitations on the types of modifications that can be constructed. As such, the consultant proposes both suggested enhancements to the proposed Caltrans design and additional modifications which could be pursued as part of separate planning and design efforts in the future.

Overall, the consultant observed the following:

x The proposed design has been refined to include reduced vehicle lane widths and expand the availability of Class IV bikeways. Additional refinements are suggested to increase separation for bicyclists and reduce turning speeds for vehicles. x Though many portions of El Camino Real will receive noticeable enhancement to bicycle facilities through the Caltrans SHOPP design, limitations of SHOPP may result in “weak links” (higher level of traffic stress situations) being maintained at a few major intersections where the cross-section is limited. The consultant team suggested enhancements which provide additional separation for bicyclists near intersections, improve pedestrian and transit accommodation, and address conflicts between vehicles and vulnerable users as a next step to build upon the proposed Caltrans design. x Revisions to the plans have resulted in anticipated improvements to interactions between bicyclists and buses at some locations, but additional enhancements are suggested to establish a desired standard for marking shared bus/bike spaces including “BUS BIKE ONLY” pavement legends and yield markings for bicyclists where feasible.

Further collaboration with transit providers, Caltrans, and City is suggested to identify short-term pilot treatments that could address interactions between buses and bicyclists. This matter is also discussed in greater detail below.

With the additional refinements noted within the memo and plan mark-ups, the improvements proposed as part of the Caltrans SHOPP project serve as a helpful first step toward improved multimodal comfort, access, and mobility along El Camino Real. Ideally, the SHOPP project would be accompanied by cooperation with transit providers to address interactions between modes at bus stops and a commitment to undertake a more comprehensive planning and design process to address the needs of all users on the corridor.

Considerations for Bus & Bike Interactions
The proposed draft bikeway plans, dated May 20, 2024, include dashed standard bike lanes that are shared with bus pull out areas except for the northbound bus stop near the El Camino Real and Park Boulevard/Serra Street intersection, which includes a dedicated bike lane and separated pull out area for buses. At most bus stops, cyclists approaching a bus at a stop would Item 31
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be expected to either wait behind the bus, merge into the vehicle lane to pass the bus on the left, or ride on the sidewalk to pass the bus on the right.

Staff from Caltrans, VTA, City, and Fehr & Peers met on May 23, 2024, to discuss opportunities to improve bike and bus interactions on El Camino Real as part of the Caltrans project.

Recommendations from that meeting include enhancing the striping and visibility of the bus stops (as noted above in the prior section), re-evaluation of bus stop locations, an education and messaging campaign on how to use the new bike lane, and a pilot bus boarding island collaboration with VTA. The meeting summary, including a list of short- and near-term recommendations, is provided as Attachment D of this report.

No Right Turns on Red
City staff and representatives from the City/School Transportation Safety Committee met to discuss the proposed Caltrans project. As school route crossings of the corridor were of primary importance for this group, key outcomes of those conversations were to request that Caltrans consider additional No Right Turn On Red (NRTOR) restrictions beyond those proposed by Caltrans at school route intersections listed on City Walk and Roll Suggested Routes Maps.

No Right Turn on Red restrictions eliminate conflict between right-turning vehicles and pedestrians and bicyclists traveling through an intersection. Multiple studies validate the effectiveness of this low-cost, high-reward safety measure. Without this restriction, right- turning drivers look to the left to find a gap in traffic and may not look for people on foot or on bicycles coming from the right. In particular, children crossing in such a scenario may not be seen due to their height relative to larger vehicles. This treatment is a best practice at locations where there is high pedestrian activity, school activity, older road users, and bicycle facilities.
12 A matrix of locations where NRTOR restrictions are proposed can be found in Attachment E.

Caltrans has proposed 17 NRTOR locations, and City staff have indicated in Attachment E the school route and other locations that could be considered for NRTOR. Due to the operational delay associated with NRTOR restrictions, Council will need to indicate which, if any, of the additional City-proposed locations should receive this treatment. From a policy perspective, the City’s Comprehensive Plan has both safety enhancement and congestion reduction as conflicting priorities, and delay (such as intersection level of service) is no longer a valid metric under the California Environmental Quality Act (CEQA). The Safe System Approach recognizes that speed is the major factor in severe injury and death in traffic collisions and that NRTOR restrictions both slow speeds and reduce points of conflict.

12 See FHWA Right Turn on Red Restrictions and Older Users guidance Item 31
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Addressing Parking Impacts
Potential Changes to RPP Districts
RPP Districts in the City are generally established via ordinance and following a public process involving documentation and analysis of a parking issue, along with public agreement (and City Council approval) of any program recommendation to be instituted. City parking programs manage parking availability to the benefit of either residents or employees, and in two cases, both residents and employees, during weekday business hours Monday-Friday, from 8:00 am to 5:00 pm or 6:00 PM depending on the program.

Only two of the City’s existing programs regulate parking resources on El Camino Real, as most of the curb space along the corridor is currently free and available for parking stays of up to 72 hours. Parking beyond 72 hours is prohibited citywide and enforced on a complaint basis. The Evergreen Park-Mayfield (EPM) Residential Parking Program (RPP) and the Southgate RPP include some frontage on El Camino Real (ECR).

In each case, parking permit availability is managed with a specified number of employee permits made available to employees with a maximum allotment allowed in set aside and signed zones. Resident permits are limited to a specific allotment per household. In the EPM RPP, ECR parking availability is managed via Zone G and in the Southgate RPP, ECR parking availability is managed via Zone S1.

In order to address the potential loss of parking spaces along ECR, staff recommends modifications to the Evergreen Park-Mayfield and Southgate RPP districts to move the appropriate number of employee permits currently sited along ECR to neighborhood zones.

Staff anticipates interim administrative changes in the near-term to avoid immediate impacts if repaving begins before Council returns. When Council returns, staff anticipates redistributing the 50 employee permits in Zone G of Evergreen Park-Mayfield across zones A, B, C, and D of that district and increasing Southgate’s’ neighborhood zone allotment from 10 to 15 in total.

Staff will work to finalize these distributions and include the discussion when it returns to Council for long-term authorization to change these two RPPS.

The EPM RPP District formerly had 250 employee permits across zones A, B, C, and D. Since those employee permits were removed from zones A-D, the City has completed construction of the Sherman Garage near California Avenue and implemented changes to the RPP program that make parking permits in garages cheaper than RPP employee permits. Staff anticipates a de minimis impact from the addition of 50 total employee permits throughout zones A, B, C, and D in EPM. Staff will monitor the utilization rates of these permits and return to Council for future changes as necessary and appropriate.

In general, neither residents nor business stakeholders who utilize these two RPP districts expect the Caltrans project to move forward without substantially impacting ECR parking.

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Other RPP districts, such as College Terrace, are not expected to be impacted by this loss of parking along ECR. Similarly, near Stanford’s frontage there are current Saturday game-day prohibitions for parking along ECR, but these would become redundant if all parking was disallowed along ECR.

Short-term Parking Solutions on Streets Adjacent to ECR Staff has conducted preliminary outreach to stakeholders including businesses sited along ECR as well as the Chamber of Commerce to discuss options for short-term parking sited on streets adjacent to ECR. This was the greatest priority for the Chamber of Commerce. Staff will continue to work to align potential changes to short-term parking (such as shorter-time limit zones of 20 minutes, green curbs, and yellow curbs) with the desires of businesses along El Camino Real. Staff will provide updates on these conversations as they continue, including timing relative to the potential removal of parking for the repaving.

Using the TMA to leverage existing resources
Parking demand by ECR businesses could be further reduced by enrolling eligible employees into transit or bike commute programs supported by the Palo Alto Transportation Management Association (TMA). The TMA supports low-income workers with transit fare subsidies and a bicycle commute incentive program. The TMA is funded by the City, and the current budget request for FY 2025 from the TMA includes a small increase over their baseline service costs to expand outreach and coverage to El Camino Real businesses. The TMA has begun working on reaching out to businesses on ECR and has already provided some services to employees.

Using the ad hoc to coordinate efforts to accommodate RV Dwellers along El Camino Real The Caltrans El Camino Real Project will result in, at minimum, temporary and potentially long- term displacement of vehicles that park along this State Highway. City staff is in regular contact with the County Office of Supportive Housing and community partners to identify ways to help vehicle dwellers who will be impacted by this project.

In response to the City’s request for clarification on notification and outreach to vehicle dwellers, Caltrans sent a communication on April 30 where Caltrans committed to providing a three-week notification to impacted businesses and parked vehicles along El Camino Real in Palo Alto. City staff requested that Caltrans share the draft of any notice/flyer with City staff before it is finalized. Sufficient notice of when vehicles may be displaced helps the City, its partners, and the impacted households to plan for resources and options. The County Office of Supportive Housing is conducting outreach and consulting with local nonprofits to help identify the characteristics of the households who may be impacted. This will help the City understand what types of services and options are needed.

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At the same time, the City is in conversation with the County, local safe parking operators, and local landowners to identify and then secure a near-term and longer-term safe parking option for these additional RVs. Next steps will be identifying funding and advancing necessary steps for the longer-term approach such as bringing to City Council a budget amendment, an urgency ordinance, contract(s), and/or lease agreement(s). The exact timing for the Caltrans project is unclear, but the parking spaces could be removed as early as July or August. Because the Council will be on its summer recess during July, staff is seeking the City Council’s authority to negotiate and enter into agreements (e.g., letter of intent, lease agreement, etc.) as needed to provide temporary safe parking to the vehicles impacted along the corridor.

In the revised Caltrans bike lane plans, existing parking on El Camino Real that can continue to accommodate vehicles will be retained on certain segments. Currently, the Caltrans Bike Lane proposal includes retaining approximately 780’ of existing parking on the West side of El Camino Real in between Galvez Street and just past Encina Avenue.

Additional Considerations
There are three items of additional consideration for the City Council. One is the need to synchronize the repaving effort with other City efforts, namely the effort along California Avenue. The second is the need for potential maintenance agreements with Caltrans, and the third is future projects anticipated from Caltrans.

Synchronizing with California Avenue Efforts
The Caltrans project offers an opportunity to coordinate upcoming improvements to the City’s Car-Free Street project on California Ave with new pavement markings at the El Camino Real/California Avenue intersection. In addition to adding stamped asphalt crosswalks to match those at Stanford Avenue and Charleston Road/Arastradero Road, staff propose a two-way bikeway on the north side of car-free California Avenue at El Camino Real to enable implementation of Council’s direction for a bicycle facility along California Avenue (Figure 1). To connect this new facility to the bike lanes across the intersection with El Camino Real, staff propose a realignment of the travel and bike lanes on California Avenue on the west leg of the intersection to accommodate the movement of eastbound cyclists into the northside bikeway along car-free California Ave. A bike lane could be inserted between a left-turn lane and a right-turn lane. Staff is working with Caltrans to determine if this work can be included in the current SHOPP program funding. Work outside of the intersection on California Avenue would need to be funded by the City.

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Figure 1: California Ave/El Camino Real Intersection Concept Plan (For Discussion Only)

Maintenance Agreements
Caltrans informed City staff of their intent to draft a Maintenance Agreement (MA) stating the City would be responsible for all maintenance and costs associated with the bike lane channelizers included in the draft bikeway plans. City staff and Caltrans staff held a virtual meeting on May 24, 2024 to discuss the proposed MA. This topic is still an ongoing negotiation with Caltrans.
13 Public entities may be liable for dangerous conditions that arise on property they maintain, even if maintenance is performed under an agreement and the property is not owned by the agency. Therefore, if the City enters into a maintenance agreement with Caltrans for the bike lane channelizers, it will assume some liability for those channelizers.

Future Caltrans Workshops and Projects
Caltrans is planning to hold a number of workshops starting in August 2024 with all El Camino Real local and regional stakeholders through Santa Clara, San Mateo, and San Francisco counties, including transit agencies. This initiative will discuss and form consensus on bicycle

13 For informational purposes, the “Agreement for Maintenance of State Highways in the City of Palo Alto” (effective July 1, 2007) is a delegated maintenance agreement between the City and Caltrans whereby the City is reimbursed by Caltrans for street sweeping and sidewalk maintenance along El Camino Real. The City submits invoices to Caltrans every six (6) months for this service. In addition, the City is responsible for maintenance costs at the intersections of Stanford Avenue and Arastradero Road/Charleston Road along El Camino Real per our maintenance agreements with Caltrans. The Stanford Avenue and Arastradero Road/Charleston Road intersection improvements along El Camino Real were City-led projects and are, therefore, the responsibility of the City to maintain.

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and pedestrian safety enhancement strategies and how they will be implemented for the corridor. This effort will also discuss and explore funding opportunities from both state and local agencies to be able to leverage funding contributions for a medium-to-long-term corridor safety enhancement investment plan. This work will be the basis of Caltrans’ Comprehensive Multimodal Corridor Plan (CMCP) development for the entirety of Highway 82/El Camino Real.

This plan will be developed through a collaborative process involving the Metropolitan Transportation Commission, County Transportation Agencies, cities and counties, transit agencies and other stakeholders within the corridor. It will include comprehensive performance assessments, analyses and evaluations leading to recommendations of system management strategies and multimodal projects for the corridor. Staff anticipates actively participating in these workshops and this planning effort.

Next Steps
The City’s engagement with Caltrans has led to significant safety improvements in the Caltrans proposal. While Caltrans’ ability to fully implement a Safe System Approach is limited by several factors, the outcome of the collaboration to date has yielded an improved plan and a mutual understanding that El Camino Real will require future planning and study to further reduce road user conflicts in key locations along the corridor. Recognizing that the current project is an initial step towards improving safety for vulnerable road users on a key corridor of the City’s High Injury Network, the City Council could choose to pursue additional actions beyond those included in staff’s recommendation. Those could include:
x Request Caltrans add Council-identified locations for No Right Turn On Red restrictions (Attachment E) and evaluate the safety and operational performance of the restrictions two to three years after implementation.
x Direct staff to continue working with Caltrans to improve the safety of the proposed bikeways, including requesting all changes to the plans recommended in the F&P memo and plan mark-ups (Attachment A) that are within the bounds of the SHOPP funding program
x Direct staff to work with Caltrans and VTA to pilot a bus boarding island program to reduce bus and bike conflicts
x Direct staff to engage in Caltrans-led planning for the El Camino Real corridor scheduled for August 2024

FISCAL/RESOURCE IMPACT
As a Caltrans project, it is not anticipated that Caltrans will ask the City for any funding for the proposed bikeway project. However, the City is absorbing the cost of hosting the community engagement meetings that are in excess of the usual standing committee calendars as well as the cost of consultant peer review of Caltrans plans. The City may also be asked to maintain the bike lane channelizers included in the draft bikeway plans. The Item 31
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City’s proposed changes at California Avenue may require City funding as well depending on discussion with Caltrans. Other costs may result from the project for altering existing City services, such as street sweeping, to maintain our quality of service.

There is also a cost associated with providing additional safe parking. If the City identifies and secures a temporary safe parking option for households living in vehicles that are displaced from El Camino Real due to the Caltrans project, there would be costs associated with leasing land and operating a safe parking site in the near term. Staff is seeking other funding options (e.g., grants, private funders) to help with this temporary need. Staff will likely require a return to Council during the mid-year budget process for any longer-term costs associated with continuing to operate additional safe parking.

STAKEHOLDER ENGAGEMENT
As discussed throughout the body of this report, there has been extensive stakeholder engagement on this project since April 1, 2024. For the full breakdown of stakeholder engagement prior to April 1, 2024, please reference the City Council Staff Report from April 1, 2024 (Agenda Item 11)

14. The following sections summarize the additional stakeholder engagement completed since April 1, 2024, organized by the Council motion areas.

Safety Improvements
x May 16, 2024 – Joint Ad Hoc Workshop with Caltrans and other stakeholders (including

SVBC, PABAC, VTA)
x May 23, 2024 – Follow-up meeting with Caltrans, VTA staff, City staff, and Fehr and Peers
x Conversations with representatives of the City/School Transportation Safety Committee x Various meetings with the ad hoc
Parking Impacts
x Conversations with the TMA
x Conversation with the Chamber of Commerce
x Targeted Survey for Businesses along ECR and Residents in neighboring RPPs x Site visits and discussions with stakeholders representing businesses and residents Vehicle Dwellers
x Participation in monthly Caltrans’ Unsheltered Encampment and Maintenance Plan of Action Meeting and correspondence with Caltrans

14 CC Staff Report (Agenda Item 11), April 1, 2024
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x Regular and ongoing conversations with community partners and the County Office of Supportive Housing

ENVIRONMENTAL REVIEW
As the lead agency, Caltrans is responsible for the environmental review of the El Camino Real Repaving Project. Caltrans has determined that this project meets the criteria for a Categorical Exemption (CE) under CEQA regulation 15301 (existing facilities) and a Categorical Exclusion (CE) under NEPA at 23 CFR 771.117(c). The City does not anticipate being a “responsible agency” under CEQA for this project because it does not anticipate having discretionary approval authority for a portion of this project.

ATTACHMENTS
Attachment A: Memo and Plan Markups from Fehr & Peers
Attachment B: Resolution in Support of Caltrans’ Repaving Project on El Camino Real Attachment C: Caltrans Bicycle Counts on El Camino Real Attachment D: Joint City of Palo Alto and Santa Clara Valley Transportation Authority (VTA) Review and Comments on Bike and Bus Conflict Areas Proposed on State Route (82)/El Camino Real (June 4, 2024)
Attachment E: Matrix of Proposed No Right Turn on Red Restrictions APPROVED BY:

Philip Kamhi, Chief Transportation Official
Item 31
Item 31 Staff Report

Item 31: Staff Report
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Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

Item 31: Staff Report
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Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

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Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

Item 31: Staff Report
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Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

Item 31: Staff Report
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Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

Item 31: Staff Report
Pg.
19 Packet Pg. 775 of 946

DRAFT 5/20/24
Eliminate 39A section downstream
from intersections, extend bikeway
and force vehicles to turn directly into
travel lanes (see example below).

This break appears to be solely for access to a fire
hydrant, there are no driveways or other curb
access needs. Continue buffer separation through
this area as marked bike lane (not conflict zone)
and provide break in channelizers/raised separation
devices to allow emergency vehicle access.

There is a small curb
extension here now
for the recently
installed PHB.

Eliminate this part of 39A
section downstream from
Monroe intersection to
increase defined bike area
- there should be sufficient
space for buffered or
separated bike lane.

Consider eliminating this part
of 39A section to avoid
effectively having 250' of
mixing zone that drivers may
use as a right-turn lane
(reduction to 100' shown).
100 ft
Continue buffer separation through this
area as marked bike lane (not conflict
zone) and provide break in
channelizers/raised separation devices
to allow emergency vehicle access to
fire hydrant in advance of driveway.

Not reviewed.

May be feasible to
provide two-stage
turn queue box.

May be feasible to
provide two-stage
turn queue box.

Universal comments:
• Verify drainage and other infrastructure in bikeway has bicycle-friendly lids • Verify placement of bike detection symbols is centered in bikeway/bike lane • Consider including limit lines across bike lanes where appropriate • Where feasible, consider quick-build curb extensions to narrow side streets, helping to reduce vehicle turning speeds
• Consider establishing a desired standard for marking shared bus/bike spaces such as the example at right (from Caltrans DIB 94) to make clear which modes are allowed and which interactions bicyclists and bus drivers should be prepared to navigate - this may include yield markings in the bikeway where suitable space is available for bicyclists to yield to buses • Opportunities for potential additional enhancements or pilot projects to consider at specific locations are indicated in these markups
• Consider additional temporal separation of modes at key intersections using signal timing strategies and/or right turn on red restrictions to reduce bicyclist/pedestrian exposure • Permissive/unsignalized left turns will require drivers to evaluate gaps in multiple lanes of traffic while monitoring the location of bicyclists, consider left-turn restrictions where feasible Interactions between bikes and buses are
likely to generally be minimal with design as
shown. The sidewalk width here could
generally accommodate less confident cyclists
diverting via driveways and intersection curb
ramps when buses are present.

Coordination with VTA to determine if this stop
location can be shifted away from a location
immediately upstream of a signal could be
beneficial in the medium- or long-term.

Interactions between bikes and buses are
likely to generally be minimal with design as
shown. The sidewalk width here could
accommodate less confident cyclists diverting
via driveways and intersection curb ramps
when buses are present (some may also pass
behind the bus stop through the edge of the
gas station site). The stop's location between
two closely spaced driveways makes
short-term modifications challenging.

These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility.

Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

Item 31: Staff Report
Pg.
20 Packet Pg. 776 of 946

DRAFT 5/20/24
Consider eliminating 39A and
marking this as a bike lane
where 6' wide and buffered
bike lane past the driveway.

Eliminate 39A section downstream
from intersection, extend bikeway
and force vehicles to turn directly
into travel lanes. Could provide
buffered bike lane without physical
separation for a portion if needed to
accommodate curb access due to
EVA needs, but there is no
apparent need for access here.

There is an exit-only
driveway here, need to
terminate separation
slightly earlier.

Reduce 39A length approaching
signal, provide buffered bike lane
(not conflict zone or separated
bike lane) so that access to minor
driveways is maintained but bike
priority is more clear.

Reduce 39A length departing
signal, provide buffered bike lane
(not conflict zone or separated
bike lane) so that access to minor
driveways is maintained but bike
priority is more clear leading to
bus stop.

Eliminate 39A section downstream
from intersection, extend bikeway
and force vehicles to turn directly
into travel lanes. It appears the
other side of this match line already
shows separated bike lane.

This is a moderately low volume stop -
interactions between bikes and buses are
likely to be minimal with design as shown,
but it would be ideal to minimize the dashed
green - this seems like more than needed for
buses to approach/depart the curb.

In the near/medium-term, this could make
sense as a location to consider piloting
in-lane stopping with some kind of boarding
island treatment given stops are likely brief.

This is a moderately low volume stop -
interactions between bikes and buses are
likely to be minimal with design as shown,
but it would be ideal to minimize the dashed
green - this seems like more than needed for
buses to approach/depart the curb.

In the near/medium-term, this could make
sense as a location to consider piloting
in-lane stopping with some kind of boarding
island treatment given stops are likely brief.

Consider separated
bikeway between
driveways.

These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility.

Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

Item 31: Staff Report
Pg.
21 Packet Pg. 777 of 946

DRAFT 5/20/24
Convert all of this to
standard Class II bike lanes,
there should be no conflict
markings in this area.

Consider adjusting this to
standard Class II bike lane
rather than conflict zone
once past the bus stop.

The Charleston/Arastradero stops are the third
busiest for transit ridership, but both provide
enough width to consider a near-term pilot of a
shared bike/pedestrian boarding platform that
would allow horizontal separation between stopped
buses and the bikeway with in-lane stops.

The striping shown is generally appropriate for the
geometric constraints, but less confident cyclists
are likely to divert to the sidewalk when buses are
present. Verify installation of green bike markings
with red bus markings is feasible according to plan.

Two-stage turn queue box is in
path-of-travel for buses using
queue jump, adjust location.

The FHWA Interim Approval for
intersection bicycle boxes calls for this
to be marked as a solid bike lane, not a
conflict zone. This would encourage
drivers waiting to turn right when the
light is red to block the bike lane that
allows bicyclists to access the bike box.

That said, this bike box may not be
necessary with a receiving bike lane
provided.

The FHWA Interim Approval for
intersection bicycle boxes
indicates at least 50' of marked
bike lane should be provided for
entry into the bike box.

Convert to standard
Class II bike lanes,
not conflict markings.

The Charleston/Arastradero stops are the third
busiest for transit ridership, but both provide
enough width to consider a near-term pilot of a
shared bike/pedestrian boarding platform that
would allow horizontal separation between
stopped buses and the bikeway with in-lane stops.

The striping shown is appropriate for the
geometric constraints, but less confident cyclists
are likely to divert to the sidewalk when buses are
present.

Evaluate feasibility of
narrowing through bike lane
extension markings to fit a
two-stage turn queue box.

Evaluate feasibility of narrowing
through bike lane extension markings
to fit a two-stage turn queue box. May
be able to also reduce turn radius
given multiple receiving lanes.

Marking should switch
from 39A to sharrows
before right-turn lane
is marked.

This is a moderately used stop according to
ridership data - interactions between bikes and
buses are likely to generally be minimal with
design as shown. The sidewalk width here
could generally accommodate less confident
cyclists diverting when buses are present,
though there is not a driveway or other ramp
immediately upstream to facilitate this.

Coordination with VTA to determine if this stop
location can be shifted away from a location
immediately upstream of a signal could be
beneficial in the medium- or long-term.

This is a moderately used stop according to
ridership data - interactions between bikes and
buses are likely to generally be minimal with
design as shown. The sidewalk width here
could generally accommodate less confident
cyclists diverting via intersection curb ramps
and driveways when buses are present.

General note - existing geometry does not lend
itself to provision of bike boxes, two-stage turn
queue boxes, or bike lane extensions across ECR
at the Maybell Avenue / El Camino Way
intersection. Future efforts could evaluate whether
reallocation of space in the ECR right-of-way
(potentially including lane reductions) could provide
space to enhance multimodal facilities.

These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility.

Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

Item 31: Staff Report
Pg.
22 Packet Pg. 778 of 946

DRAFT 5/20/24
Consider separated bikeway,
would reduce bicyclist
exposure to vehicles treating
this space as a right-turn lane.

This is a moderately used stop according to
ridership data - interactions between bikes and
buses are likely to generally be minimal with
design as shown. The sidewalk width here
could generally accommodate less confident
cyclists diverting via intersection curb ramps
and driveways when buses are present.

Provide separated bikeway
between driveways.

Consider separated
bikeway if buses can
maneuver back to the
travel lane more quickly.

These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility.

Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

Item 31: Staff Report
Pg.
23 Packet Pg. 779 of 946

DRAFT 5/20/24
Consider separated
bikeway if buses can
maneuver back to the
travel lane more quickly.

Consider separated
bikeway if buses can
maneuver back to the
travel lane more quickly.

Eliminate 39A section downstream
from intersections, extend bikeway
and force vehicles to turn directly
into travel lanes.

Provide separated bikeway to
discourage vehicles intruding
into bikeway, which will reduce
visibility of peds at crossing.

Consider providing solid
(buffered) bike lane across
these driveways before
starting 39A at intersection.

Limit line?
Consider separated bikeway if
buses can maneuver back to
the travel lane more quickly,
would reduce bicyclist
exposure to vehicles treating
this space as a right-turn lane.

This could pair well with
dedicated corner treatment
mentioned above left.

Consider small separated
bikeway section before
driveways. A quick-build
curb extension in this corner
could help facilitate this,
coordinate with City.

Consider separated bikeway,
would reduce bicyclist
exposure to vehicles treating
this space as a right-turn lane.This is a moderately used stop according to ridership data - interactions between bikes
and buses are likely to generally be
minimal with design as shown. The
sidewalk width here could generally
accommodate less confident cyclists
diverting via intersection curb ramps and
driveways when buses are present.

This is a moderately used stop according to
ridership data - interactions between bikes
and buses are likely to generally be minimal
with design as shown. The sidewalk width
here could generally accommodate less
confident cyclists diverting via driveways
when buses are present.

Two-stage turn queue box
should be placed in front of
bike lane and WB through
lane on El Camino Way,
not in front of right-turn
lane on El Camino Way.

Also need to verify location
shown isn't inside the
crosswalk.

Quick-build dedicated corner may be
feasible here with striping and vertical
delineators; future improvement could
include protected corner construction.

This two-stage turn
queue box is shown
inside the crosswalk.

A two-stage turn queue box may
not be feasible here without
modifying crosswalks; location
shown is partially in the path of
through vehicle traffic and also
impedes path of through
bicyclists on EB Los Robles
(traveling onto El Camino Way).

If noncompliant curb ramp in
this corner is being upgraded,
may be possible to realign
crosswalks.

Eliminate 39A section downstream
from intersections, extend bikeway
and force vehicles to turn directly
into travel lanes.

These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility.

Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

Item 31: Staff Report
Pg.
24 Packet Pg. 780 of 946

DRAFT 5/20/24
Provide separated bikeway
between driveways or mark
entire area as (buffered) bike
lane rather than show entire
zone with conflict markings.

This break appears to be solely for access to a fire
hydrant, there are no driveways or other curb
access needs. Continue buffer separation through
this area as marked bike lane (not conflict zone)
and provide break in channelizers/raised separation
devices to allow emergency vehicle access.

Provide separated bikeway to
discourage vehicles intruding
into bikeway, which will reduce
visibility of peds at crossing.

Eliminate 39A section downstream
from intersections, extend bikeway
and force vehicles to turn directly
into travel lanes.

This is a moderately used stop according to
ridership data - interactions between bikes
and buses are likely to be minimal with
design as shown, but it would be ideal to
reduce downstream dashed green.

Consider separated
bikeway if buses can
maneuver back to the
travel lane more quickly,
but coordination with City
on adjacent land use plans
may be needed.

Provide separated bikeway to
discourage vehicles intruding
into bikeway, which will reduce
visibility of peds at crossing.

Provide separated bikeway to
discourage vehicles intruding
into bikeway, which will reduce
visibility of peds at crossing.

Eliminate 39A section downstream
from intersections, provide
separated bikeway.

Provide separated bikeway
(can provide openings in
physical separation for EVA
as needed, maintain buffer).

This curb cut has
been eliminated,
provide separated
bikeway here similar
to treatment in other
direction on ECR at
this intersection.

This is a moderately used stop according to
ridership data - interactions between bikes
and buses are likely to generally be
minimal with design as shown, but it would
be ideal to reduce downstream dashed
green. The sidewalk width here could
generally accommodate less confident
cyclists diverting via intersection curb
ramps when buses are present.

This is a moderately used stop according to
ridership data - interactions between bikes
and buses are likely to be minimal with
design as shown, but it would be ideal to
reduce downstream dashed green.

Consider separated
bikeway if buses can
maneuver back to the
travel lane more quickly.

These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility.

Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

Item 31: Staff Report
Pg.
25 Packet Pg. 781 of 946

DRAFT 5/20/24
Mark as solid Class II
bike lane until
approach to Pepper
Avenue, including
across driveway.

Eliminate 39A section downstream
from intersections, extend bikeway
and force vehicles to turn directly
into travel lanes.

Eliminate 39A section downstream
from intersections, extend bikeway
and force vehicles to turn directly
into travel lanes.

Evaluate adjustments to signal
operations and bikeway width to allow
two-stage turn queue boxes off of ECR
onto Hansen/Portage given offset
intersection geometry precludes more
typical turning or protected intersection
strategies. (Extends beyond SHOPP.)
Beyond SHOPP, evaluate elimination
of pork chop islands and reallocation
of space to improve pedestrian
crossings and bike circulation.

Eliminate 39A section downstream
from intersections, extend bikeway
and force vehicles to turn directly
into travel lanes. This is a moderately low volume stop - interactions between bikes and buses are
likely to be minimal with design as shown,
but some cyclists may elect to diver to the
sidewalk via intersection curb ramps (note
that current site construction on east side
of ECR may temporary affect this).

In the near/medium-term, it may be
desirable to coordinate with VTA to
evaluate relocation of this stop - it is
located within what is functionally a single
signalized intersection at Hansen/Portage.

This is a moderately low volume stop - interactions
between bikes and buses are likely to be minimal with
design as shown, but some cyclists may elect to diver
to the sidewalk via intersection curb ramps. This could be a good location to look at some kind of bus
boarding island (or bike/pedestrian boarding platform)
in the near-term in coordination with the transit
agencies to address this issue. There may be space
available to allow construction of a full bus boarding
island with separation of bikes here if pursued in
coordination with adjacent property owners.

Consider separated
bikeway if buses can
maneuver back to the
travel lane more quickly.

Consider using edgelines to better
define pork chop island and allow
marking of solid bike space
(possible separated) adjacent to it.

Provide separated bikeway
between driveways or mark
entire area as (buffered) bike
lane rather than show entire
zone with conflict markings.

If separate left- and right-turn lanes
are not needed on Hansen, could
consider modifying this to a
quick-build protected corner around
the existing pork chop island in place
(require counts/coordinate with City).

These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility.

Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

Item 31: Staff Report
Pg.
26 Packet Pg. 782 of 946

DRAFT 5/20/24
Solid bike lane, no need
for 39A downstream of
intersection.

Eliminate 39A section downstream
from intersections, extend bikeway
and force vehicles to turn directly
into travel lanes.

Consider providing separated
bikeway between two driveways.

In near-term, consider phase
separations or other signal timing
strategies to separate vehicle
movements from active modes
(including peds) and/or provide greater
warning of interactions. Requires
Caltrans and County coordination.

Crosswalk setbacks could make
two-stage turn queue boxes feasible
on all legs to facilitate bicyclist
movements as part of SHOPP.

Mark as solid Class II
bike lane beyond
limits of bus stop.

This is a moderately busy bus stop serving
providers beyond VTA only. Modified
geometry shown in plans would
accommodate bicycling on sidewalk, but
would be appropriate to pursue revised
geometry that could provide bus boarding
island given potential for additional space.

The FHWA Interim Approval for
intersection bicycle boxes
indicates at least 50' of marked
bike lane should be provided for
entry into the bike box.

This is likely a moderately busy bus stop
in terms of ridership - data were not
available due to recent temporary
closures. Modified geometry shown in
plans would accommodate bicycling on
sidewalk with bicyclists able to access this
space via intersection curb ramps when
buses are present.

Mark as solid Class II bike lane
beyond limits of bus stop if
possible - coordinate with VTA.

Consider adding edgeline to reduce
travel lane width; could include
reflectors and or delineators behind
edgeline where feasible to
discourage drivers from traversing. Mark as solid Class II bike lane, provide shorter 39A segment at
minor intersections.

Consider short section of
separated bikeway before
right-turn lane opens to
reduce distance bicyclists
mix with vehicles.

These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility.

Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

Item 31: Staff Report
Pg.
27 Packet Pg. 783 of 946

DRAFT 5/20/24
This is a moderately low volume stop -
interactions between bikes and buses are
likely to be minimal with design as shown,
but it would be ideal to reduce downstream
dashed green. The sidewalk is generous
adjacent to this stop and less confident
bicyclists may utilize that space between
Oxford and the driveway.

Consider ~50' of solid bike lane here to
break up conflict zones.

While facility width standards vary in
different documents, it may also be a better
bicycle experience to consider a 6' Class IV
bikeway with 2' buffer including separation
(or even 5'+3'), then driveway breaks could
be treated as dashed green.

Eliminate 39A section downstream
from intersections, extend bikeway
and force vehicles to turn directly
into travel lanes. Eliminate 39A section downstream
from intersections, extend bikeway
and force vehicles to turn directly
into travel lanes. Consider
protected bikeway here (see PD-24
for comments on continuation).

Eliminate 39A section downstream
from intersections, extend bikeway
and force vehicles to turn directly
into travel lanes.

Consider short segment of separated
bikeway between inbound and outbound
driveways for Jack In The Box - the
downstream taper of the separation can be
omitted if needed due to constraints. This
should still allow enough space for 50' of
39A approaching Cambridge Avenue.

Eliminate 39A section downstream
from intersections, extend bikeway
and force vehicles to turn directly
into travel lanes. Break separated
bikeway for driveway.

With closure of
California Avenue,
this can be separated
bikeway since vehicle
right turns will no
longer exist.

Lane configuration may change
with California Avenue closure, bike
left turn can either be
accommodated with two-stage turn
queue box to reach NB ECR or be
marked using dotted lines with
green through intersection per CA
MUTCD Figure 9C-1(CA) if bike
lane shifts to be between separate
left- and right-turn lanes.

Adjust dimensions to
provide two-stage
turn queue box from
NB ECR to WB
California Avenue.

Determine if bike
striping through
intersection can be
adjusted to provide
two-stage turn queue
box from SB ECR to
EB California Avenue.

The California Avenue stops have VTA's highest ridership on ECR in Palo Alto and serve as time point stops for 22/522 service. At times, much of the block face between California Avenue and Cambridge Avenue is occupied by buses.

Striping as indicated is appropriate for SHOPP. Some cyclists may divert to sidewalk using curb ramps at the signalized intersections (though sidewalk is well utilized). Signs warning bicyclists of potential interactions with buses and pedestrians could be considered.

Consider short-term pilot of shared pedestrian/bike boarding islands that allow buses to stop in the outside travel lane to evaluate effect on safety and operations in collaboration with Caltrans and VTA. If buses stopped in-lane, a shared
boarding island could provide 4' of separation between a stopped bus and a 5' bikeway for bicyclists and transit riders to gauge interactions. In medium- or long-term, evaluate projects that could provide additional space to separate bicyclists and buses through reduction of travel lanes and/or other cross-section adjustments.

The California Avenue stops have VTA's highest ridership on ECR in Palo Alto and serve as time point stops for 22/522 service.

Striping as indicated is appropriate for SHOPP. Some cyclists may divert to sidewalk using curb ramps at the signalized intersections (though sidewalk is well utilized and space constrained). Signs warning bicyclists of potential interactions with buses and pedestrians could be considered.

Consider short-term pilot of shared pedestrian/bike boarding islands that allow buses to stop in the outside travel lane to evaluate effect on safety and operations in collaboration with Caltrans and VTA. If buses stopped in-lane, a shared
boarding island could provide 5' of separation between a stopped bus and a 5' bikeway for bicyclists and transit riders to gauge interactions. In medium- or long-term, evaluate projects that could provide additional space to separate bicyclists and buses through reduction of travel lanes and/or other cross-section adjustments.

May be feasible to provide
bikeway separation,
coordinate with VTA on
stop length needs. In-lane
stopping pilot would help
facilitate this.

If left-turn lane can be
eliminated, add
median refuge.

Eliminate 39A section downstream
from intersections, extend bikeway
and force vehicles to turn directly
into travel lanes.

General note - future project evaluating
reallocation of space on ECR cross-section could
also look at protected corners/intersections for
crossing bicycle facilities at intersections like
California Avenue and Stanford Avenue.

These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility.

Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

Item 31: Staff Report
Pg.
28 Packet Pg. 784 of 946

DRAFT 5/20/24
Two-stage turn queue box
should be placed in front of
bike lane and EB through
lane on Serra, not in front
of right-turn lane on Serra.

Two-stage turn queue box
should be placed in front of
bike lane and WB through
lane on Park, not in front of
right-turn lane on Park.

Consider introducing
two-stage turn queue
boxes for turns onto
ECR as well.

Consider introducing
two-stage turn queue
boxes for turns onto
ECR as well.

This is a moderately low volume stop -
interactions between bikes and buses are
likely to be minimal with design as shown
(plus the Stanford trail is an attractive
alternate route), but it would be ideal to
minimize the dashed green - this seems like
more than needed for buses to
approach/depart the curb.

In the near/medium-term, this could make
sense as a location to consider piloting
in-lane stopping with some kind of boarding
island treatment given stops are likely brief.

This seems like it can be
separated bikeway if buses
can maneuver back to the
travel lane more quickly.

This is a moderately low volume stop -
interactions between bikes and buses are
likely to be minimal with design as shown
(plus the Stanford trail is an attractive
alternate route), but it would be ideal to
minimize the dashed green - this seems like
more than needed for buses to
approach/depart the curb (see PD-25).

In the near/medium-term, this could make
sense as a location to consider piloting
in-lane stopping with a bus boarding island
treatment that allows bikes to pass behind
the island given bus stops are likely brief
and there is enough space to separate
bicyclists from transit riders.

Eliminate 39A section downstream
from intersections, extend bikeway
and force vehicles to turn directly
into travel lanes. Eliminate 39A section downstream
from intersections, extend bikeway
and force vehicles to turn directly
into travel lanes.

This is a moderately low volume stop -
interactions between bikes and buses are
likely to be minimal with design as shown
and driveways/intersections provide
opportunity for bikes to divert to sidewalk (if
not already diverted to Stanford trail at the
signalized intersection).

As this is effectively an in-lane stop as
shown, it may be desirable to coordinate
with VTA on potential to shift the stop to a
nearby location that might also allow some
kind of bus boarding island/curb extension
treatment (may not be short-term solution).

Consider providing separated
bikeway here and allowing 39A
across driveway to the north
serve as the break for Leland
Avenue intersection.

The FHWA Interim Approval for
intersection bicycle boxes calls for this
to be marked as a solid bike lane, not a
conflict zone. This would encourage
drivers waiting to turn right when the
light is red to block the bike lane that
allows bicyclists to access the bike box.

That said, this bike box may not be
necessary with a receiving bike lane
provided. Can a 5' bike lane be
extended to the intersection and the
separated bikeway extended?
Suggest shifting the two-stage turn queue box
to be more directly in front of Stanford Avenue
to improve visibility of bicyclists to approaching
vehicles. Location of box shown in plans could
result in drivers losing track of waiting bikes if
they try to turn right on red (which should be
prohibited). Adjust crossbike accordingly.

Consider introducing
two-stage turn queue
boxes for turns onto
ECR as well.

Consider introducing
two-stage turn queue
boxes for turns onto
ECR as well.

Consider marking as solid
Class II bike lane across
driveways.

Consider marking as solid Class II bike
lane across driveways.

While facility width standards vary in
different documents, it may also be a
better bicycle experience to consider a 6'
Class IV bikeway with 2' buffer including
separation (or even 5'+3'), then driveway
breaks could be treated as dashed green.

Ensure existing ped
refuges are maintained
These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility.

Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

Item 31: Staff Report
Pg.
29 Packet Pg. 785 of 946

DRAFT 5/20/24
Should not use sharrows in
intersection. Suggest using
dotted lines with green through
intersection per CA MUTCD
Figure 9C-1(CA).

This is a low volume stop - interactions
between bikes and buses are likely to be
minimal with design as shown (plus the
Stanford trail is an attractive alternate route),
but it would be ideal to minimize the dashed
green - this seems like more than needed for
buses to approach/depart the curb.

This is a low volume stop - interactions
between bikes and buses are likely to be
minimal with design as shown (plus the
Stanford trail or adjacent sidewalk are both
alternates), but it would be ideal to minimize
the dashed green - this seems like more than
needed for buses to approach/depart the curb.

Bring bike lane stripe
to intersection.

This isn't a vehicle interaction
zone at a T-intersection,
consider marking as solid bike
lane through intersection.

The FHWA Interim Approval for
intersection bicycle boxes
indicates at least 50' of marked
bike lane should be provided for
entry into the bike box.

Eliminate 39A section downstream
from intersections, extend bikeway
and force vehicles to turn directly
into travel lanes.

There should be no interactions in
this space, suggest marking as solid
bike lane at minimum and potentially
including buffer/separation.

Eliminate 39A section downstream
from intersections, extend bikeway
and force vehicles to turn directly
into travel lanes.

If feasible, provide edgeline and
physical separation to separate the
bus stop from the frontage
intersection and provide a short
segment of solid bike lane between
to reduce exposure for bicyclists
and clarify positioning for drivers.

Consider separated
bikeway if buses can
maneuver back to the
travel lane more quickly.

It's unclear if this intersection
design accommodates turns
from SB ECR to Churchill or the
adjacent Churchill path - would
recommend some kind of
jughandle treatment to facilitate
this bike movement separate
from pedestrians.

These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility.

Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

Item 31: Staff Report
Pg.
30 Packet Pg. 786 of 946

DRAFT 5/20/24
This is an extremely low volume stop -
interactions between bikes and buses are likely
to be minimal with design as shown (plus the
Stanford trail is an attractive alternate route),
but it would be ideal to minimize the dashed
green - this seems like more than needed for
buses to approach/depart the curb. Separate
dashed green is not likely needed because of
the driveway that is typically closed.

This is an extremely low volume stop - interactions
between bikes and buses are likely to be minimal
with design as shown (plus the Stanford trail is an
attractive alternate route in both directions for
those who aren't fearless/confident riders), but it
would be ideal to minimize the dashed green - this
seems like more than needed for buses to
approach/depart the curb.

Consider separated
bikeway if buses can
maneuver back to the
travel lane more quickly.

Consider separated bikeway if
buses move toward the curb later,
including using the area in front of
the driveway.

Consider separated
bikeway if buses move
toward the curb later.

See PD-25
These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility.

Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

Item 31: Staff Report
Pg.
31 Packet Pg. 787 of 946

DRAFT 5/20/24
Add edgeline to reduce width
of outside lanes (universal
where no bike facility).

Suggest either adding a quick-build dedicated
corner here with additional striping/vertical
separation (see NACTO Don't Give Up at the
Intersection) to keep drivers from passing over
this corner or shifting the two-stage turn queue
box to be more directly in front of the right lane
on Embarcadero Road to improve visibility of
bicyclists to approaching vehicles. Location of
box shown in plans could result in drivers
losing track of waiting bikes if they try to turn
right on red (which should be prohibited).

Need to bring the bike lane
markings back to the intersection
to make the crossbike across ECR
work here. May also need to make
connection opportunity to Stanford
trail more clear at intersection.

Suggest removing this - bike
aren't required to turn right and
this could simply be signed as
the end of the bike lane.

If provided, place in
center of travel lane.

This can be solid and
separated since right
turns are channelized, not
occurring at the signal.

Ideally, a bike pocket here would provide bicyclists exiting the Stanford trail an opportunity to stage at the signal before continuing southbound. There is plenty of spa ec and could be separated with striping and physical elements from
channelized rights.

A long-term opportunity
could be to consider proper
trail crossings for the
Stanford trail.

Marguerite stops here.

Given adjacent
school and availability
of space, a two-stage
turn queue box here
would be desirable.

Treat this part as a separated bikeway
to avoid vehicles cruising in bicycle
space. Upstream dashing would be
provided for transit, downstream
would be provided for driveway
conflicts and end of bikeway.

This is the VTA stop.

This transit stop is fairly high
volume, but the driveway cuts
would provide opportunity to
avoid buses using the sidewalk.

Fearless/confident bicyclists
may travel here, but most other
bicyclists will probably divert
across to the Stanford trail and
not pass this stop.

This is a fairly busy bus stop, so it may be
accurate that this much stopping space is
needed. Fearless/confident bicyclists may
travel here, but most bicyclists will probably
divert to the Stanford trail and not pass this
stop on-street.

Long-term, there is likely sufficient space to
consider partnering with adjacent property
owners and VTA to implement permanent
bus boarding islands at this location.

General note - the ECR/Embarcadero/Galvez
intersection generally has enough space that it
may be feasible to pursue a long-term protected
intersection design.

These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility.

Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

Item 31: Staff Report
Pg.
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DRAFT 5/20/24
Add edgeline to reduce width
of outside lanes (universal
where no bike facility).

Consider adjusting striping to make a
more clearly delineated single-lane
exit that opens into additional lanes
on ramp. Design as shown provides
less clarity to drivers.
eline to reduce width
e lanes (universal
o bike facility).

This transit stop is fairly high
volume, but most bicyclists will
not interact with it since they will
be on the adjacent Stanford trail.

These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility.

Item 31
Attachment A - Fehr &
Peers El Camino Real
Memo & Plan Mark-ups

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DRAFT 5/20/24
Should not have bike lane
symbol in intersection. Suggest
using dotted lines with green
through intersection per CA
MUTCD Figure 9C-1(CA).

Bikes turning across painted
buffer and then having 39A with
green in the shifting area for
drivers is confusing for all users.

May make more sense to more
clearly mark an edgeline and
segregate travel paths for
drivers and bicyclists, see
below.

This entire area appears to avoid
marking the bike lane on top of the
concrete bus pad/gutter, but the
much larger width of the concrete
pad and alignment exiting the Quarry
Road intersection leave bicycles
more exposed by doing so. May need
to at least shift bike lane near Quarry
to clarify path of travel for vehicles
entering from University ramp.

Add edgeline to reduce width
of outside lanes (universal
where no bike facility).

11.0 ft
Could make this narrower
than 7' to provide more
distance for vehicle shift.

If feasible, make this
solid green with solid
white stripe to discourage
vehicles from entering.

Could shift bicycle toward curb here
and make solid bike lane (or even add
buffer/separation) to avoid long stretch
of exposure for bicyclists.

Is this just directing bicycles
into the curb ramp opening?
That is an atypical application
of intersection markings.

If feasible, introduce some separated
bikeway length here to avoid drivers
using it as a very long right-turn lane.

There is a lot of space here, suggest coordination
with Samtrans on near-term pilot of a shared
bike/pedestrian boarding platform that would
allow horizontal separation between stopped
buses and the bikeway with in-lane stops.

Depending on ridership, it may also be possible to
consider eliminating this northbound stop since
it's quite close to the Palo Alto Transit Center for
people accessing transit.

This could be a good location to look at
some kind of bus boarding island (or
bike/pedestrian boarding platform) in the
near-term in coordination with the transit
agencies to address this issue.

Bicyclists can access trail
here to avoid interaction
with buses at stop.

These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility.

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Peers El Camino Real
Memo & Plan Mark-ups

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DRAFT 5/20/24
It may be preferable to put a
buffer or separation here with a
narrower bikeway. Could also
somewhat narrow bike lane and
add buffer between LT lane and
through lanes to reduce shift
through intersection.

Should not have bike lane
symbol in intersection. Suggest
using dotted lines with green
through intersection per CA
MUTCD Figure 9C-1(CA).

Bike lane should not terminate this way -
continue further north after crossing the
right-turn traffic before terminating. Using
signal timing strategies to avoid exposing
bicyclists to traffic attempting to turn onto
ECR from Palo Alto Avenue is
recommended. Long-term, a more
conventional intersection approach on
Palo Alto Avenue could help to clarify
right-of-way between modes.

Consider providing
solid Class II bike
lane striping exiting
Sand Hill Road, only
use 39A for 50-100
feet before Pistachel
Place driveway.

Solid bike lane, no need
for 39A downstream of
intersection.

Could improve visibility of
bicyclists by shifting
toward travel lanes before
opening right-turn lane.

Note that this bicycle left turn is not accommodated today, signage indicates bikes should go through to Palo Alto
Avenue only. If providing this movement, recommend
phase-separating turns off Palo Alto Avenue onto NB ECR to avoid interactions with bicyclists.

Provide bike lane
extension through
intersection if bike
lane is being marked
on far side.

These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility.

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Peers El Camino Real
Memo & Plan Mark-ups

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DRAFT 5/20/24
Why a 5'/2' pattern instead of
the more typical 2'/2' pattern
(which has been used to date
on El Camino Real)?
These comments represent suggestions based on a review of the proposed design plans and existing conditions, but require further engineering evaluation to verify feasibility.

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Memo & Plan Mark-ups

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NOT YET APPROVED

106_20240320_ts24 1

Resolution No. _____
Resolution of the Council of the City of Palo Alto in Support of Caltrans’ Repaving Project on El Camino Real

R E C I T A L S

A. El Camino Real is a state highway maintained by the California Department of Transportation (Caltrans); and
B. Caltrans plans to resurface El Camino Real in Palo Alto in 2024; and C. Caltrans is prepared to install bicycle lanes along El Camino Real within the City of Palo Alto, in addition to pavement rehabilitation, striping improvements, and curb ramps, sidewalks, and driveway improvements to comply with Americans with Disabilities Act (ADA) standards (the “project”); and
D. Use of the road as bicycle lanes would require the conversion of all on-street parking along El Camino Real within the City of Palo Alto; and
E. Creating and maintaining a sustainable transportation system that provides safe, comfortable, and convenient travel along and across streets through a comprehensive, integrated transportation network that emphasizes walking, bicycling, use of public transportation, and other modes to reduce greenhouse gas (GHG) emissions and the use of single-occupancy motor vehicles is, and has been a major focus for the City of Palo Alto; and
F. The adopted Transportation Element of the City of Palo Alto Comprehensive Plan 2030 includes the following goals, policies, and programs in support of bicycle facilities along El Camino Real:
x Goal T-1 Create a sustainable transportation system, complemented by a mix of land uses, that emphasizes walking, bicycling, use of public transportation and other methods to reduce GHG emissions and the use of single-occupancy motor vehicles. x Policy T-1.3 Reduce GHG and pollutant emissions associated with transportation by reducing VMT and per-mile emissions through increasing transit options, supporting biking and walking, and the use of zero-emission vehicle technologies to meet City and State goals for GHG reductions by 2030.
x Policy T-1.16 Promote personal transportation vehicles as an alternative to cars (e.g. bicycles, skateboards, roller blades) to get to work, school, shopping, recreational facilities and transit stops.
x Policy T-1.19 Provide facilities that encourage and support bicycling and walking. x Program T1.19.2 Prioritize investments for enhanced pedestrian access and bicycle use within Palo Alto and to/from surrounding communities, including by incorporating improvements from related City plans, for example the 2012 Palo Alto Bicycle + Pedestrian Transportation Plan and the Parks, Trails & Open Space Master Plan, as amended, into the Capital Improvements Program.
x Policy T-3.5 When constructing or modifying roadways, plan for use of the roadway by all users.

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Resolution in Support of
Caltrans' Repaving Project
on El Camino Real

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x Program T3.5.1 Continue to use best practices in roadway design that are consistent with complete streets principles and the Urban Forest Master Plan, focusing on bicycle and pedestrian safety and multimodal uses. Consider opportunities to incorporate best practices from the National Association of City Transportation Officials guidelines for urban streets and bikeways, tailored to the Palo Alto context. x Policy T-3.11 Consider the objectives of the Grand Boulevard Initiative and the South El Camino Boulevard Design Guidelines when designing roadway and pedestrian improvements along El Camino Real.
x Policy T-3.12 Coordinate roadway improvements with other transportation and utility infrastructure improvements such as sewer and water.
x Policy T-3.13 Work with Caltrans, Santa Clara County and VTA to improve east and west connections in Palo Alto and maintain a circulation network that binds the city together in all directions.
x GOAL T-6 Provide a safe environment for motorists, pedestrians and bicyclists on Palo Alto streets.
x Policy T-6.1 Continue to make safety the first priority of citywide transportation planning. Prioritize pedestrian, bicycle and automobile safety over motor vehicle level of service at intersections and motor vehicle parking.
x Policy T-6.2 Pursue the goal of zero severe injuries and roadway fatalities on Palo Alto city streets.
x GOAL T-8 Influence the shape and implementation of regional transportation policies and technologies to reduce traffic congestion and GHG emissions. x Policy T-8.2 Coordinate with local and regional agencies and Caltrans to maintain and improve transportation infrastructure in Palo Alto, including the Multi-Modal Transit Center.
x Policy T-8.8 Support regional bicycle and pedestrian plans including development of the Bay Trail, Bay-to-Ridge Trail and the Santa Clara County Countywide Bicycle System. x Program T8.8.1 Identify and improve bicycle connections to/from neighboring communities in Santa Clara and San Mateo counties to support local trips that cross city boundaries. Also advocate for reducing barriers to bicycling and walking at freeway interchanges, expressway intersections and railroad grade crossings.

G. The 2018 Caltrans District 4 Bike Plan identifies the implementation of Class IV protected bikeways on El Camino Real in Palo Alto as a Tier 1 project; and H. Caltrans is the lead agency for purposes of CEQA and has found this project Class 1 (existing facilities) categorically exempt under CEQA regulation 15301.

NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows:

SECTION 1. The City Council of the City of Palo Alto hereby expresses its support for the the removal of parking on El Camino Real within the City of Palo Alto to allow Caltrans to proceed with its project.

Item 31
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Resolution in Support of
Caltrans' Repaving Project
on El Camino Real

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106_20240320_ts24 3

SECTION 2. Environmental Review. As the lead agency for this project, Caltrans has found this project to be categorically exempt under CEQA regulation 15301 (existing facilities). Should the City be determined to be a responsible agency under CEQA, the City has considered the lead agency’s determination.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

__________________________ _____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

__________________________ _____________________________ Assistant City Attorney City Manager

_____________________________
C h i e f T r a n s p o r t a t i o n O f f i c i a l

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Resolution in Support of
Caltrans' Repaving Project
on El Camino Real

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EL CAMINO REAL BIKE COUNTS - APPROACH VOLUMES
DATE: WEDNESDAY MARCH 13, 2024
PERIOD: 7:00 AM to 7:00 PM
El Camino Real
1 20 27 139 (Shopping C
103 34
1 NW NE 3
14 1
86 SW SE 22
Embarcadero Road Embarcad e
40 03 7
El Camino Real
## in street
## on sidew
a
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Bicycle Counts on El
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EL CAMINO REAL BIKE COUNTS - APPROACH VOLUMES
DATE: WEDNESDAY MARCH 13, 2024
PERIOD: 7:00 AM to 7:00 PM
El Camino Real
20 82 11
1 37
0 NW NE 57
127 93
38 SW SE 47
California Avenue California Avenue
15 12 16
El Camino Real
## in street
## on sidewalk/path
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EL CAMINO REAL BIKE COUNTS - APPROACH VOLUMES
DATE: WEDNESDAY MARCH 13, 2024
PERIOD: 7:00 AM to 7:00 PM
El Camino Real
9 90 8
6 7
0 NW NE 1
19 0
15 SW SE 17
Page Mill Road Page Mill Road
10 03 19
El Camino Real
## in street
## on sidewalk/path
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EL CAMINO REAL BIKE COUNTS - APPROACH VOLUMES
DATE: WEDNESDAY MARCH 13, 2024
PERIOD: 7:00 AM to 7:00 PM
El Camino Real
11 80 13
11 31
0 NW NE 129
134 0
1 SW SE 17
Arastradero Road Arastradero Road
5 05 24
El Camino Real
## in street
## on sidewalk/path
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Bicycle Counts on El
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OFFICE OF TRANSPORTATION

250 Hamilton Ave, 5th Floor
Palo Alto, CA 94301
(650) 329-2520
[email protected]

Memo

Date:

June 4, 2024
To: Caltrans El Camino Real Council Ad Hoc Committee
From: Philip Kamhi (City of Palo Alto Office of Transportation) & Lauren Ledbetter (VTA Bicycle and Pedestrian Program Manager)
Subject: Joint City of Palo Alto and Santa Clara Valley Transportation Authority (VTA) Review and Comments on Bike and Bus Conflict Areas Proposed on State Route (82)/El Camino Real

On May 16, 2024, the Caltrans El Camino Real Council Ad Hoc Committee requested a meeting between VTA, Caltrans, and City staff to discuss bus stop treatments to add to the current bikeway proposal that accommodates bus stops within the new bike lanes.1 Under this configuration, cyclists approaching a bus at a stop are expected to either wait behind the bus, safely merge into the vehicle lane to pass the bus on the left, or merge onto the sidewalk and pass the bus on the right.

A follow up meeting with Caltrans staff, VTA staff, City staff, and Fehr & Peers was held virtually on May 23, 2024, to discuss the proposed bike facilities at bus stops and identify other opportunities to improve bike and bus interactions on El Camino Real.

Caltrans staff presented a range of various bus stop design treatments that were generally consistent with the designs featured in VTA’s Bus Stop & Passenger Facility Design Criteria and Standards (December 2020), Caltrans’ Design Information Bulletin-9 4 Complete Streets Contextual Design Guidance (DIB-94) (January 16, 2024), and Caltrans’ Design Information Bulletin-89-02 (DIB-89-02) (February 7, 2022).

DIB-94 includes strategies to reduce conflicts between buses and cyclists (see DIB-94, Section 7.3) and states that “[i]n general, preference should first be given to a design that provides separate spaces for bicyclists to move within their travel way, for buses to stop, and for pedestrians to wait and board bus vehicles. The next-preferred design option would provide a lower degree of separation, integrating pedestrians and bicyclists through the boarding area. The third preference would be to provide a space shared by bicyclists and buses.”
There was consensus that right-of-way constraints severely limit the bus stop treatments that can be implemented within the Caltrans project. Even so, there was agreement that the City and VTA would

1The proposed draft bikeway plans, dated May 20, 2024, include one improved bus stop near the north- east corner of the El Camino Real and Park Boulevard/Serra Street intersection which does not require the bus stop and bike lane to share space. This stop retains a dedicated bike lane and a separated pull-out area for buses.

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VTA Review and
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2 further investigate the high frequency bus stops for any treatments that do not require additional right- of-way. To support this work, VTA shared bus stop utilization and ridership (boardings and alightings) data revealing the highest frequency stops to be those at California Avenue, Embarcadero/Galvez, and Charleston/Arastradero.

The following sections provide examples of the range of design treatments referenced in the design standard documents above and discussed in the meeting.

Bus Stop Designs Featuring Separated Spaces
Bus boarding island platforms (i.e., side-boarding islands or floating islands) (see Figure 1) represent an example design featuring separated spaces for bikes and buses. However, given the limitations in scope and right-of-way along El Camino Real, it was concluded that bus boarding island platforms would need to be considered in a future project separate from the current Caltrans project.

Figure 1: Example of Bus Boarding Island in San Francisco

Source: Caltrans DIB-94

Bus Stop Designs Featuring Integrated Bicycle/Pedestrian Spaces An integrated bike/pedestrian zone at bus stops (see Figure 2) is an example design featuring integrated bicycle/pedestrian spaces, however, given the limitations in scope and right-of-way along El Camino Real, it was concluded that these designs would need to be considered in a future project separate from Caltrans SHOPP project. Additionally, VTA design guidelines prohibit integrated bicycle/pedestrian zones at bus stops. The agency cannot commit to a permanent installation but would be willing to participate in a temporary pilot to understand how an integrated stop could be designed to prevent conflicts between transit customers and bicyclists. A pilot would need to be completed outside of the current Caltrans repaving project to allow for the lead time associated with pre-launch planning, outreach, engineering, funding identification, materials procurement, construction, and staff resource identification.

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3 Figure 2: Diagram of an Integrated Bicycle/Pedestrian Zone at a Bus Stop (MassDOT Separated Bike Lane Guide)

Source: Caltrans DIB-94
Bus Stop Designs Featuring Shared Bike/Bus Spaces
The following bikeway designs featuring shared bike and bus spaces were also discussed:
• Dashed standard bike lane shared with bus pull out area (current proposal for most stops - see Figure 3)
• Dashed standard bike lane with separated bus pull out area (current proposal for 1 stop) • Dashed buffered bike lane with separated bus pull out area Figure 3: Bus Stop in Standard Bike Lane with No Parking

Source: VTA Bus Stop & Passenger Facility Design Criteria and Standards (December 2020) Additional Strategies Considered
Below are several other design strategies and programs that were considered in addition to the above bus stop designs:
• Class I bikeway and signage (as needed) directing bicyclists to ride on sidewalk around bus stop.

This was not recommended after staff analysis documented in the next section.

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4 • On-street markings to clarify conflict areas and right-of-way for bicyclists and buses. This is recommended based on the discussion in the next section. • Relocate bus stops to locations with additional right-of-way that would allow for separated bike/bus design treatments. VTA recently rebalanced bus stops on ECR, so this would not be ideal.
• Educational materials and techniques for transit operators and bicycle educators to encourage safer interactions between buses and bicyclists. This is recommended below.

Assessment of Bus Stops along El Camino Real
Sidewalk Use
Palo Alto staff performed a qualitative assessment of the six high frequency bus stops to determine the feasibility of potential treatments to improve bike and bus interactions. One question to resolve was whether existing sidewalks could be used for both bicycle and pedestrian traffic when buses are stopped in the bike lane at bus stops. When buses block the bike lane, the sidewalk could potentially provide a safer alternative for cyclists than passing a bus on the left in the adjacent travel lane. Potential conflicts with pedestrians could occur depending on sidewalk width, but these conflicts may be less severe than potential bus/bike or car/bike conflicts if cyclists or drivers make a mistake.

To safely support bus loading as well as bicycle and pedestrian traffic, adjacent sidewalks would need to accommodate a bus landing of 5 feet wide by 8 feet deep plus a 10’ sidewalk clearance, for a total width of 18 feet. The results of this bus stop analysis are in Table 1, which includes the following:
• the average number of buses per day that use that stop • average number of boardings/alightings per day
• presence of a concrete bus pad at the stop
• estimate of the sidewalk width adjacent to the stop
Table 1: Highest Frequency Bus Stops for Routes 22/522 – Riders, Bus Pads, Sidewalk Width